Completed Contract Method
Gross Profit to be recognized |
Profit should not be recognized before completion of project |
|
Construction Costs Incurred during the Year |
1,185,800 |
|
Partial Billings on contract: 6,000,000 * 25% |
-1,500,000 |
|
Billings on uncompleted contract in excess of related cost |
-314,200 |
Percentage-of Completion Method
Contract Price |
6,000,000 |
Estimated total cost : (1,185,800 + 4,204,200) |
-5,390,000 |
Estimated Total Gross Profit from Contract |
$ 610,000 |
Percentage of Completion (1,185,800 /5,390,000) |
22% |
Gross Profit to be recognized during the year: 610,000 * 22% |
$ 134,200 |
Exercise 18-37 Your answer is partially correct. Try again. Yanmei Construction Company began operations on January...
(Recognition of Profit and Balance Sheet Amounts for Long-Term Contracts)Yanmei Construction Company began operations January 1, 2012. During the year, Yanmei Construction entered into a contract with Lundquist Corp. to construct amanufacturing facility. At that time, Yanmei estimated that it would take 5 years to complete the facility at a total cost of $4,500,000. The total contract pricefor construction of the facility is $8,520,000. During the year, Yanmei incurred $1,683,836 in construction costs related to the construction project. Theestimated cost...
Problem 18-11 Your answer is partially correct. Try again. On July 1, 2020, Cullumber Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,920,000. On July 1, Cullumber estimated that it would take between 2 and 3 years to complete the building. On December 31, 2022, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2020,...
Problem 18-11 Your answer is partially correct. Try again. On July 1, 2020, Sunland Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,880,000. On July 1, Sunland estimated that it would take between 2 and 3 years to complete the building. On December 31, 2022, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2020,...
Problem 18-11 Your answer is partially correct. Try again. On July 1, 2017, Coronado Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,880,000. On July 1, Coronado estimated that it would take between 2 and 3 years to complete the building. On December 31, 2019, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2017,...
Teal Construction Company began operations on January 1, 2017. During the year, Teal Construc t ed to complete the total cost of 1,500,000. The total contract price for construction of the days cost to complete the correct is $4,264 40 Land Corp was bed and paid of the contract price with LundstCorp to construct a minut e tot Acthat time. Talestined that it would take 5 years 1000 During the war, Tattored $1.1325 in construction costs related to the construction...
1.Hometown Construction Corp. entered into a long-term contract to build an office building for Outsider Corp. at a fixed contract price of $27.5 million on 6/15/2016. Construction of the building is completed on 12/15/2018. Hometown Construction expects the building to be completed in two and a half years and uses the Percentage of Completion Method (cost to cost approach) to account for the contract. Cost information related to the contract are as follows: 2016 2017 2018 Actual Construction costs incurred...
Accounting 305 Chapters 2 & 3 Homework Hometown Construction Corp. entered into a long-term contract to build an office building for Outsider Corp. at a fixed contract price of $27.5 million on 6/15/2016. Construction of the building is completed on 12/15/2018. Hometown Construction expects the building to be completed in two and a half years and uses the Percentage of Completion Method (cost to cost approach) to account for the contract. Cost information related to the contract are as follows:...
Problem 18-10 On March 1, 2017, Sheffield Construction Company contracted to construct a factory building for Fabrik Manufacturing Inc. for a total contract price of $8,340,000. The building was completed by October 31, 2019. The annual contract costs incurred, estimated costs to complete the contract, and accumulated billings to Fabrik for 2017, 2018, and 2019 are given below: 2017 2019 2018 $2,811,600 $2,152,400 $2,336,000 2,336,000 Contract costs incurred during the year Estimated costs to complete the contract at3,578,400 12/31 Billings...
Problem 18-10 On March 1, 2017, Culver Construction Company contracted to construct a factory building for Fabrik Manufacturing Inc. for a total contract price of $8,450,000. The building was completed by October 31, 2019. The annual contract costs incurred, estimated costs to complete the contract, and accumulated billings to Fabrik for 2017, 2018, and 2019 are given below: 2019 $1,962,900 Contract costs incurred during the year Estimated costs to complete the contract at 12/31 Billings to Fabrik during the year...
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