Question

Sheffield Construction, Inc. experienced the following construction activity in 2021, the first year of operations. Contract Total Contract Price Billings Through 12/31/21 Cash Collections Through 12/31/21 Costs Incurred Through 12/31/21 Estimated Additional Costs to Complete X $265,000 $175,000 $160,000 $192,000 $ 68,000 Y 335,000 120,000 120,000 110,000 257,000 Z 238,000 238,000 208,000 168,000 -0- $838,000 $533,000 $488,000 $470,000 $325,000 Each of the above contracts is with a different customer, and any work remaining at December 31, 2021 is expected to be completed in 2022. Prepare a partial income statement to indicate how the above contract information would be reported. Sheffield uses the completed-contract method.

Sheffield Construction, Inc. experienced the following construction activity in 2021, the first year of operations. Contract Х Cash Total Billings Collections Contract Through Through Price 12/31/21 12/31/21 $265,000 $175,000 $160,000 335,000 120,000 120,000 238,000 238,000 208,000 $838,000 $533,000 $488,000 Costs Estimated Incurred Through Additional Costs to 12/31/21 Complete $192,000 $ 68,000 110,000 257,000 168,000 -0- $470,000 $325,000 Y Z Each of the above contracts is with a different customer, and any work remaining at December 31, 2021 is expected to be completed in 2022. Prepare a partial income statement to indicate how the above contract information would be reported. Sheffield uses the completed-contract method. Sheffield Construction, Inc. Partial Income Statement For the Year 2021

Prepare a partial balance sheet to indicate how the above contract information would be reported. Sheffield uses the completed-contract method. (List Current Assets in order of liquidity.)

Answer 1

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A B С D E F G н 1 2 х Y 3 4 5 6 Total contract price Billings through 12/31/21 Cash collection 265000 175000 335000 120000 238000 238000 838000 533000 Costs Estimated Additional costs 160000 192000 68000 120000 110000 257000 208000 168000 0 488000 470000 325000 Z 7 8 9 Amount 110000 257000 238000 10 11 12 Income Statement For the year ended 2021 Revenue Cost of construction Gross profit Provision for loss (Contract Y) Contract Y Contract cost through 12/31/21 Estimated Additional costs Total costs Total contract price Loss Recognized in 2021 168000 70000 320001 367000 335000 13 32000 14 15 16 17 45000 18 19 192000 Partial Balance Sheet Current Assets Accounts Receivable Inventories Construction in process (contract X) Less:Billings Unbilled contract costs Current liabilities Billings in excess of contract costs (Y) Estimated liability from long-term contracts 20 175000 17000 21 22 23 10000 32000 24 25 Sheet211 Sheet212 Sheet213 Sheet214 Sheet215 Sheet216 Sheet217 Sheet218 Stats IIII Ready Type here to search O X

For calculation ref:

А. B с D E F G 1 2 3 х 4 Y Z Total contract price Billings through 12/31/21 Cash collection 265000 175000 160000 335000 120000 120000 238000 238000 208000 =SUM(C3:05) =SUM(D3:05) =SUM(E3:E5) Costs Estimated Additional costs 192000 68000 110000 257000 168000 0 =SUM(F3:F5) =SUM(G3:65) 5 6 7 8 9 10 Income Statement For the year ended 2021 Revenue Cost of construction Gross profit Provision for loss (Contract Y) Contract Y Amount Contract cost through 12/31/21 =F4 Estimated Additional costs =G4 Total costs =SUM(F9:F10) Total contract price =C4 Loss Recognized in 2021 =F11-F12 =C5 =F5 =C10-C11 =F13 11 12 13 14 15 Partial Balance Sheet 16 17 =D6-E6 18 19 20 Current Assets Accounts Receivable Inventories Construction in process (contract X) Less:Billings Unbilled contract costs Current liabilities Billings in excess of contract costs (Y) Estimated liability from long-term contracts =F3 =D3 21 =C19-C20 22 23 =E4-F4 24 =F13 25 Sheet211 Sheet212 Sheet213 Sheet214 Sheet215 Sheet216 Sheet217 Sheet218 Stats Ready