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***PLEASE SHOW WORK*** % of Completion On May 1, 2013, Chapin Construction Company entered into a...

***PLEASE SHOW WORK***

% of Completion

On May 1, 2013, Chapin Construction Company entered into a $4,000,000 fixed-price contract to build an apartment building.Expected completion date is November, 2014.Assume a zero balance in the cash account as of 5/1/2013.

Please fill in Journal Entries and the Financial Statements below.Data pertaining to the construction period are as follows:

2013

2014

2015

Total

Contract price

4,000,000

Costs incurred to date

           800,000

        2,550,000

           3,500,000

Estimated costs to complete

        2,400,000

           850,000

                      -  

Progress Billings during year

           850,000

        2,100,000

        1,050,000

4,000,000

Collections during year

           700,000

        2,000,000

        1,300,000

4,000,000

PART 1

2013 2014 2015

% Complete

Rev. Recog

GP Recog

PART 2

Journal Entries

2013

2014

2015

CIP

Cash,Mtls, A/P, etc.

A/R

Billings

Cash

A/R

Billings

Revenue

Construction Expense

CIP

PART 3

Balance Sheet:

Current Assets

A/R

Costs &GP in Excess of Billings

Current Liabilities

Billings in Excess of Costs & GP

Income Statement

Revenue from Contract

Construction Expense

Gross Profit on Contract

Solutions

Expert Solution

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  • Working---

2013

2014

2015

Contract Price

$    4,000,000.00

$ 4,000,000.00

$    4,000,000.00

Cost Incurred to Date

$        800,000.00

$ 2,550,000.00

$    3,500,000.00

Estimated cost yet to be incurred to complete the contract

$    2,400,000.00

$      850,000.00

$                          -  

Total Cost

$    3,200,000.00

$ 3,400,000.00

$    3,500,000.00

% of Completion

25.00%

75.00%

100.00%

Revenue to date

$    1,000,000.00

$ 3,000,000.00

$    4,000,000.00

Revenue of Previous year

$                          -  

$ 1,000,000.00

$    3,000,000.00

Net Revenue this year

$    1,000,000.00

$ 2,000,000.00

$    1,000,000.00

Cost to date

$        800,000.00

$ 2,550,000.00

$    3,500,000.00

Cost to date of previous year

$                          -  

$      800,000.00

$    2,550,000.00

Net Cost for the year

$        800,000.00

$ 1,750,000.00

$        950,000.00

Gross Profits

$        200,000.00

$      250,000.00

$          50,000.00

  • Answers

2013

2014

2015

% Complete

25.00%

75.00%

100.00%

Rev. Recog

$    1,000,000.00

$ 2,000,000.00

$    1,000,000.00

GP Recog

$        200,000.00

$      250,000.00

$          50,000.00

Journal Entries

2013

2014

2015

CIP

$        800,000.00

$ 1,750,000.00

$        950,000.00

Cash,Mtls, A/P, etc.

$        800,000.00

$ 1,750,000.00

$        950,000.00

A/R

$        850,000.00

$ 2,100,000.00

$    1,050,000.00

Billings

$        850,000.00

$ 2,100,000.00

$    1,050,000.00

Cash

$        700,000.00

$ 2,000,000.00

$    1,300,000.00

A/R

$        700,000.00

$ 2,000,000.00

$    1,300,000.00

Billings

$        850,000.00

$ 2,100,000.00

$    1,050,000.00

Revenue

$        850,000.00

$ 2,100,000.00

$    1,050,000.00

Construction Expense

$        800,000.00

$ 1,750,000.00

$        950,000.00

CIP

$        200,000.00

$      250,000.00

$          50,000.00

Revenue

$    1,000,000.00

$ 2,000,000.00

$    1,000,000.00

Balance Sheet:

2013

2014

2015

Current Assets

A/R

$        150,000.00

$      250,000.00

$                          -  

Costs &GP in Excess of Billings

$                          -  

$                        -  

$                          -  

Current Liabilities

Billings in Excess of Costs & GP

$          50,000.00

$      350,000.00

$                          -  

Income Statement

2013

2014

2015

Revenue from Contract

$    1,000,000.00

$ 2,000,000.00

$    1,000,000.00

Construction Expense

$        800,000.00

$ 1,750,000.00

$        950,000.00

Gross Profit on Contract

$        200,000.00

$      250,000.00

$          50,000.00

ekkarill92 answered 2 years ago
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