Question
In: Accounting
In January 2019, Miller Construction Corp. contracted to construct a building for $3,600,000. Construction started in...
In January 2019, Miller Construction Corp. contracted to construct a building for $3,600,000. Construction started in early 2019 and was completed in 2020. The following additional information is available:
| 2019 | 2020 | |
|---|---|---|
| Cost Incurred | $1,458,000 | $1,620,000 |
| Estimated costs to complete | 1,560,000 | - |
| Billed | 1,700,000 | 1,900,000 |
| Collections during the year | 1,440,000 | 2,160,000 |
Miller uses the percentage-of-completion method.
Under the contract-based approach for percentage completion,
a) How much revenue should Miller report for 2019 and 2020?
b) Prepare all journal entries for 2019 and 2020 for this contract.
c) What amounts would be presented on Miller’s December 31, 2019 Balance Sheet?
d) What is the gross profit on the project for each of 2019 and 2020?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
In January 2019, Miller Construction Corp. contracted to construct a building for $3,600,000. Construction started in...
In January 2019, Miller Construction Corp. contracted to
construct a building for $3,600,000. Construction started in early
2019 and was completed in 2020. The following additional
information is available:
2019
2020
Costs
incurred......................................................
$1,458,000
$1,620,000
Estimated costs to
complete..................................
1,560,000
—
Billed
……………………………………………….
1,700,000
1,900,000
Collections during the
year....................................
1,440,000
2,160,000
Miller uses the percentage-of-completion method.
Instructions
Under the contract-based approach for percentage
completion,
a) How much revenue should Miller report for 2019...
In January 2010, Construction Corp. contracted to construct a building for $ 6,000,000. Construction started in...
In January 2010, Construction Corp. contracted to construct a
building for $ 6,000,000. Construction started in early 2010 and
was completed in 2011. The following additional information is
available:
2010
2011
Costs
incurred.............................................................
$
2,430,000
$ 2,700,000
Estimated costs to
complete.............................................
2,600,000
—
Collections during the
year..............................................
2,400,000
3,600,000
Billings for
the year …………………………………………..
2,800,000
3,200,000
Used the percentage-of-completion method.
Instructions
Under the contract-based approach,
a) How much revenue
should be reported...
MSK Construction Company contracted to construct a factory building for $525,000. Construction started during 2019 and...
MSK Construction Company contracted to construct a factory
building for $525,000. Construction started during 2019 and was
completed in 2020. Information relating to the contract
follows:
2019
2020
Costs incurred during the
year
$
290,000
$
150,000
Estimated additional cost to
complete
145,000
—
Billings during the year
260,000
265,000
Cash collections during the
year
240,000
285,000
Required:
Record the preceding transactions in MSK’s books assuming it
recognizes revenue over time and uses costs incurred to measure the
extent to...
On March 1, 2019, Asbah contracted Nabali & Fares Construction Co. to construct a building on...
On March 1, 2019, Asbah contracted Nabali & Fares
Construction Co. to construct a building on land costing $800,000
(purchased from the contractor and included in the first payment).
The construction began on the office building on March 1. The
following expenditures were incurred for construction:
Date Expenditures
March 1, 2019 $ 1,200,000
May 1, 2019 1,680,000
August 1, 2019 3,000,000
September 30, 2019 4,800,000
The building was completed and ready for occupancy on
September 30, 2019. To finance purchase...
On March 1, 2019, Asbah contracted Nabali & Fares Construction Co. to construct a building on...
On March 1, 2019, Asbah contracted Nabali & Fares
Construction Co. to construct a building on land costing $800,000
(purchased from the contractor and included in the first payment).
The construction began on the office building on March 1. The
following expenditures were incurred for construction: Date
Expenditures March 1, 2019 $ 1,200,000 May 1, 2019 1,680,000 August
1, 2019 3,000,000 September 30, 2019 4,800,000 The building was
completed and ready for occupancy on September 30, 2019. To finance
purchase...
On March 1, 2019, Asbah contracted Nabali & Fares Construction Co. to construct a building on...
On March 1, 2019, Asbah contracted Nabali & Fares
Construction Co. to construct a building on land costing $800,000
(purchased from the contractor and included in the first payment).
The construction began on the office building on March 1. The
following expenditures were incurred for construction:
Date Expenditures
March 1, 2019 $ 1,200,000
May 1, 2019 1,680,000
August 1, 2019 3,000,000
September 30, 2019 4,800,000
The building was completed and ready for occupancy on
September 30, 2019. To finance purchase...
On March 1, 2019, Asbah contracted Nabali & Fares Construction Co. to construct a building on...
On March 1, 2019, Asbah contracted Nabali & Fares
Construction Co. to construct a building on land costing $800,000
(purchased from the contractor and included in the first payment).
The construction began on the office building on March 1. The
following expenditures were incurred for construction: Date
Expenditures March 1, 2019 $ 1,200,000 May 1, 2019 1,680,000 August
1, 2019 3,000,000 September 30, 2019 4,800,000 The building was
completed and ready for occupancy on September 30, 2019. To finance
purchase...
Thrasher Construction Co. was contracted to construct a building for $975,000. The building is owned by...
Thrasher Construction Co. was contracted to construct a building
for $975,000. The building is owned by the customer throughout the
contract period. The contract provides for progress payments.
Thrasher’s accounting year ends 31 December. Work began under the
contract on 1 July 20X5, and was completed on 30 September 20X7.
Construction activities are summarized below by year:
20X5 Construction costs incurred during the year, $180,000;
estimated costs to complete, $630,000; progress billings during the
year, $153,000; and collections, $140,000. 20X6...
The Ugenti Construction Company contracted to construct a warehouse building for $2,600,000. Construction began in 2016...
The Ugenti Construction Company contracted to construct a
warehouse building for $2,600,000. Construction began in 2016 and
was completed in 2017. Data relating to the contract are summarized
below:
2016
2017
Costs incurred during the
year................. $
360,000
$1,650,000
Estimated costs to complete as of
12/31.
1,560,000
-
Billings during the year
..........................
430,000
2,170,000
Cash collections during the
year..............
320,000
2,280,000
Required:
1. Compute the amount of
gross...
On May 1, 2020, Jackson Construction Company contracted to construct a factory building for a total...
On May 1, 2020, Jackson Construction Company contracted to
construct a factory building for a total contract price of
$9,600,000. The building was completed by May 31,2022. The annual
contract costs incurred, estimated costs to complete the contract,
and accumulated billings to Fabrik for 2020, 2021, and 2022 are
given
below.
2020
2021
2022
Contract costs incurred during the year
$3,400,000
$2,400,000
$2,900,000
Estimated costs to complete the contract at Dec
31 ...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- The equivalent synchronous impedance of a 25kVA, 400V three-phase Y-connected synchronous generator is 0.05 + j1.6...
- You have $100,000 to invest in either Stock D, Stock F, or a risk-free asset. You...
- In two or three sentences, explain how you have seen the concept of grit work in...
- You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella Co.,...
- Parallel Arrays This question is in MindTap Cengage Summary In this lab, you use what you...
- 5. You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella...
- JAVA Write a test program that prompts the user to enter a series of integers and...
ADVERTISEMENT