Question
In: Accounting
Exercise 6-24 (Algo) Long-term contract; revenue recognition over time; solve for unknowns [LO6-9] In 2021, Long...
Exercise 6-24 (Algo) Long-term contract; revenue recognition over time; solve for unknowns [LO6-9]
In 2021, Long Construction Corporation began construction work
under a three-year contract. The contract price is $3,200,000. Long
recognizes revenue over time according to percentage of completion
for financial reporting purposes. The financial statement
presentation relating to this contract at December 31, 2021, is as
follows:
| Balance Sheet | |||||||
| Accounts receivable (from construction progress billings) | $ | 46,000 | |||||
| Construction in progress | $ | 300,000 | |||||
| Less: Billings on construction contract | (290,000 | ) | |||||
| Cost and profit of uncompleted contracts in excess of billings | 10,000 | ||||||
| Income Statement | |||
| Income (before tax) on the contract recognized in 2021 | $ | 36,000 | |
Required:
1. What was the cost of construction actually
incurred in 2021?
2. How much cash was collected in 2021 on this
contract?
3. What was the estimated cost to complete as of
the end of 2021?
4. What was the estimated percentage of completion
used to calculate revenue in 2021? (Round your percentage
answer to 2 decimal places.)
|
|||||||||||||||||||||
Solutions
PLEASE....UPVOTE....THANK.YOU....SO..MUCH....
ekkarill92 answered 2 years agoRelated Solutions
Exercise 6-19 (Algo) Long-term contract; revenue recognition over time and at a point in time [LO6-9]...
Exercise 6-19 (Algo) Long-term contract; revenue recognition
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contracted to provide a customer with Internet infrastructure for
$2,100,000. The project began in 2021 and was completed in 2022.
Data relating to the contract are summarized below: 2021 2022 Costs
incurred during the year $ 308,000 $ 1,615,000 Estimated costs to
complete as of 12/31 1,232,000 0 Billings during the year 390,000
1,640,000 Cash collections during the year 270,000 1,760,000...
Problem 6-10 (Algo) Long-term contract; revenue recognition over time [LO6-8, 6-9] [The following information applies to...
Problem 6-10 (Algo) Long-term contract; revenue recognition over
time [LO6-8, 6-9]
[The following information applies to the questions
displayed below.]
In 2021, the Westgate Construction Company entered into a contract
to construct a road for Santa Clara County for $10,000,000. The
road was completed in 2023. Information related to the contract is
as follows:
2021
2022
2023
Cost incurred during the year
$
2,490,000
$
3,984,000
$
2,008,600
Estimated costs to complete as of year-end
5,810,000
1,826,000
0
Billings during...
Required information Problem 6-10 (Algo) Long-term contract; revenue recognition over time [LO6-8, 6-9] [The following information...
Required information
Problem 6-10 (Algo) Long-term contract; revenue
recognition over time [LO6-8, 6-9]
[The following information applies to the questions
displayed below.]
In 2021, the Westgate Construction Company entered into a contract
to construct a road for Santa Clara County for $10,000,000. The
road was completed in 2023. Information related to the contract is
as follows:
2021
2022
2023
Cost incurred
during the year
$
2,044,000
$
2,628,000
$
2,890,800
Estimated costs
to complete as of year-end
5,256,000
2,628,000
0...
Problem 5-10 Long-term contract; revenue recognition over time [LO5-8, 5-9] [The following information applies to the...
Problem 5-10 Long-term contract; revenue recognition over time
[LO5-8, 5-9]
[The following information applies to the questions
displayed below.]
In 2018, the Westgate Construction Company entered into a contract
to construct a road for Santa Clara County for $10,000,000. The
road was completed in 2020. Information related to the contract is
as follows:
2018
2019
2020
Cost incurred during the
year
$
2,580,000
$
4,042,000
$
2,175,800
Estimated costs to complete as
of year-end
6,020,000
1,978,000
0
Billings during...
Exercise 5-20 Long-term contract; revenue recognition upon project completion; loss projected on entire project [LO5-8, 5-9]...
Exercise 5-20 Long-term contract; revenue recognition upon
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On February 1, 2018, Arrow Construction Company entered into a
three-year construction contract to build a bridge for a price of
$8,025,000. During 2018, costs of $2,010,000 were incurred, with
estimated costs of $4,010,000 yet to be incurred. Billings of
$2,512,000 were sent, and cash collected was $2,260,000.
In 2019, costs incurred were $2,512,000 with remaining costs
estimated to be $3,615,000. 2019 billings were...
Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3]...
Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product
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Walsh Company manufactures and sells one product. The following
information pertains to each of the company’s first two years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
23
Direct labor
$
16
Variable manufacturing overhead
$
4
Variable selling and administrative
$
3
Fixed costs per year:
Fixed manufacturing overhead
$
240,000
Fixed selling and administrative expenses
$
90,000
During its first...
Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3]...
Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product
Costs and Income Statements [LO6-1, LO6-2, LO6-3]
Walsh Company manufactures and sells one product. The following
information pertains to each of the company’s first two years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
22
Direct labor
$
14
Variable manufacturing overhead
$
4
Variable selling and administrative
$
3
Fixed costs per year:
Fixed manufacturing overhead
$
400,000
Fixed selling and administrative expenses
$
70,000
During its first...
Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3]...
Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product
Costs and Income Statements [LO6-1, LO6-2, LO6-3]
Walsh Company manufactures and sells one product. The following
information pertains to each of the company’s first two years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
25
Direct labor
$
17
Variable manufacturing overhead
$
2
Variable selling and administrative
$
1
Fixed costs per year:
Fixed manufacturing overhead
$
400,000
Fixed selling and administrative expenses
$
80,000
During its first...
P18-9 (LO5,6) EXCEL (Recognition of Profit on Long-Term Contract) Shanahan Construction Company has entered into a...
P18-9 (LO5,6) EXCEL (Recognition of Profit on Long-Term
Contract) Shanahan Construction Company has entered into
a contract beginning January 1, 2017, to build a parking complex.
It has been estimated that the complex will cost $600,000 and
will take 3 years to construct. The complex will be billed to the
purchasing company at $900,000. The following data pertain to
the construction period.
2017 2018 2019
Costs to date $270,000 $450,000 $610,000
Estimated costs to complete 330,000 150,000 –0–
Progress billings...
Exercise 3-19 (Algo) Calculating ratios; solve for unknowns [LO3-8] The current asset section of Guardian Consultant’s...
Exercise 3-19 (Algo) Calculating ratios; solve for unknowns
[LO3-8]
The current asset section of Guardian Consultant’s balance sheet
consists of cash, accounts receivable, and prepaid expenses. The
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prepaid expenses, $390,000; long-term assets, $2,700,000; and
shareholders’ equity, $2,800,000. The current ratio at the end of
the year was 2.5 and the debt to equity ratio was 1.3.
Required:
Determine the following 2021 amounts and ratios: (Round
your "The acid-test ratio" answer to 1...
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