Dear Student,
As the HOMEWORKLIB POLICY, only the first four parts should be answered. Kindly take note of it.
Part 1
Completed contract
When a long term construction contract is completed, the revenue recognized at completion should be equal to revenue recognized at the delivery point of time. To recognize revenue over the period of time requires to allocating expected revenues and costs to each construction period. The allocation basis is determine on the basis of each period’s project cost incurred in proportion to the total estimated cost of project.
Part 2
2018 |
2019 |
|
Contract price |
24000000 |
24000000 |
Actual costs to date |
4,800,000 |
16200000 (11,400,000+4,800,000) |
Estimated costs to complete |
14,400,000 |
5,400,000 |
Total estimated costs |
19200000 |
21600000 |
Estimated gross profit |
4800000 |
2400000 |
A. Revenue recognition:
2018 : $0
2019 : $0
total Revenues will be recognized only in 2020
B. Gross profit recognition:
2018 : $0
2019 : $0
gross profit will be recognized only in 2020
C. Citation will report in its December 31, 2018, balance sheet related to this contract = $2400000 (Costs – billings = 4800000-2400000 = 2400000)
Balance sheet (partial)
At December 31, 2018
Current assets: |
|
Accounts receivable (2400000-2160000) |
240000 |
Costs in excess of billings |
2400000 |
Current liabilities: |
|
Citation Builders, Inc., builds office buildings and single-family homes. The office buildings are constructed under contract with reputable buyers. The homes are constructed in developments ranging...
Citation Builders, Inc., builds office buildings and single-family homes. The office buildings are constructed under contract with reputable buyers. The homes are constructed in developments ranging from 10-20 homes and are typically sold during construction or soon after. To secure the home upon completion, buyers must pay a deposit of 10% of the price of the home with the remaining balance due upon completion of the house and transfer of title. Failure to pay the full amount results in forfeiture...
Citation Builders, Inc., builds office buildings and single-family homes. The office buildings are constructed under contract with reputable buyers. The homes are constructed in developments ranging from 10–20 homes and are typically sold during construction or soon after. To secure the home upon completion, buyers must pay a deposit of 10% of the price of the home with the remaining balance due upon completion of the house and transfer of title. Failure to pay the full amount results in forfeiture...
Citation Builders, Inc., builds office buildings and single-family homes. The office buildings are constructed under contract with reputable buyers. The homes are constructed in developments ranging from 10−20 homes and are typically sold during construction or soon after. To secure the home upon completion, buyers must pay a deposit of 10% of the price of the home with the remaining balance due upon completion of the house and transfer of title. Failure to pay the full amount results in forfeiture...
Citation Builders, Inc., builds office buildings and single-family homes. The office buildings are constructed under contract with reputable buyers. The homes are constructed in developments ranging from 10−20 homes and are typically sold during construction or soon after. To secure the home upon completion, buyers must pay a deposit of 10% of the price of the home with the remaining balance due upon completion of the house and transfer of title. Failure to pay the full amount results in forfeiture...
Citation Builders, Inc., builds office buildings and single-family homes. The office buildings are constructed under contract with reputable buyers. The homes are constructed in developments ranging from 10−20 homes and are typically sold during construction or soon after. To secure the home upon completion, buyers must pay a deposit of 10% of the price of the home with the remaining balance due upon completion of the house and transfer of title. Failure to pay the full amount results in forfeiture...
Citation Builders, In., builds office buildings and single-family homes. The office buildings are constructed under contract with reputable buyers. The homes are constructed in developments ranging from 10-20 homes and are typically sold during construction or soon after. To secure the home upon completion, buyers must pay a deposit of 10% of the price of the home with the remaining balance due upon completion of the house and transfer of title. Failure to pay the full amount results in forfeiture...
Citation Builders, Inc., builds office buildings and single-family homes. The office buildings are constructed under contract with reputable buyers. The homes are constructed in developments ranging from 10−20 homes and are typically sold during construction or soon after. To secure the home upon completion, buyers must pay a deposit of 10% of the price of the home with the remaining balance due upon completion of the house and transfer of title. Failure to pay the full amount results in forfeiture...
Arizona Desert Homes (ADH) constructed a new subdivision during 2017 and 2018 under contract with Cactus Development Co. Relevant data are summarized below: Contract amount $ 3,315,000 Cost: 2017 1,270,000 2018 670,000 Gross profit: 2017 905,000 2018 470,000 Contract billings: 2017 1,657,500 2018 1,657,500 ADH recognizes revenue upon completion of the contract. What is the journal entry in 2018 to record revenue? Multiple Choice Construction in progress 1,375,000 Cost of construction 1,940,000 Revenue from long-term contracts 3,315,000 Cost of construction...
Arizona Desert Homes (ADH) constructed a new subdivision during 2017 and 2018 under contract with Cactus Development Co. Relevant data are summarized below: Contract amount $ 3,315,000 Cost: 2017 1,270,000 2018 670,000 Gross profit: 2017 905,000 2018 470,000 Contract billings: 2017 1,657,500 2018 1,657,500 ADH recognizes revenue upon completion of the contract. What is the journal entry in 2018 to record revenue? Multiple Choice Construction in progress 1,375,000 Cost of construction 1,940,000 Revenue from long-term contracts 3,315,000 Cost of construction...
On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $360 million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): 2018 2019 2020 Costs incurred during the year Estimated costs to complete as of December 31 S 30 140 $40...