Question
In: Accounting
I have a question regarding the percentage-of-completion. For example, A company wants to make a contract...
I have a question regarding the percentage-of-completion.
For example, A company wants to make a contract with B constructor. The estimated cost was $900,000, and the contractor wants to add a margin of 10% on its cost estimate.
On the day of the formed of the contract, the finalized cost was $1,000,000. The small storage room will be finished in 3 years, and each year $95,000, $120,000, $250,000 will be incurred for 3 years.
1. Please recognized the revenue over time with the percentage-of-completion method.
2. Does that margin is necessary for the calculation, and if not, when do I need to use it.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Using Percentage-of-Completion and Completed Contract Methods Halsey Building Company signed a contract to build an office...
Using Percentage-of-Completion and Completed Contract
Methods
Halsey Building Company signed a contract to build an office
building for $40,000,000. The scheduled construction costs
follow.
Year
Cost
2016
$9,000,000
2017
15,000,000
2018
6,000,000
Total
$30,000,000
The building is completed in 2018.
For each year, compute the revenue, expense, and gross profit
reported for this construction project using each of the following
methods.
a. Percentage-of-completion method
2016
2017
2018
Revenue
Answer
Answer
Answer
Expense
Answer
Answer
Answer
Gross Profit
Answer
Answer
Answer...
A company uses the percentage-of-completion method to account for a 4-year construction contract. Which of the...
A company uses the percentage-of-completion method to account
for a 4-year construction contract. Which of the following should
be used in the calculation of the income recognized in the
first year?
Select one:
a. Progress Billings, but not Collections on Progress
Billings
b. Collections on Progress Billings, but not Progress
Billings
c. Both Progress Billings and Collections on Progress
Billings
d. Neither Progress Billings nor Collections on Progress
Billings
Percentage-of-Completion and Completed Contract Methods Philbrick Company signed a three-year contract to provide sales training to...
Percentage-of-Completion and Completed Contract Methods
Philbrick Company signed a three-year contract to provide sales
training to the employees of Elliot Company. The contract price is
$1,200 per employee and the estimated number of employees to be
trained is 400. The expected number to be trained in each year and
the expected training costs follow.
Number of
Employees
Training Costs
Incurred
2016
125
$60,000
2017
200
75,000
2018
75
40,000
Total
400
$175,000
Required
For each year, compute the revenue, expense,...
Percentage-of-Completion and Completed Contract Methods Philbrick Company signed a three-year contract to provide sales training to...
Percentage-of-Completion and Completed Contract
Methods
Philbrick Company signed a three-year contract to provide sales
training to the employees of Elliot Company. The contract price is
$1,200 per employee and the estimated number of employees to be
trained is 400. The expected number to be trained in each year and
the expected training costs follow.
Number of
Employees
Training Costs
Incurred
2016
125
$60,000
2017
200
75,000
2018
75
40,000
Total
400
$175,000
Required
For each year, compute the revenue, expense,...
I have a question regarding supply and demand in microecconomics. For example, when there is population...
I have a question regarding supply and demand in
microecconomics.
For example, when there is population growth, does demand shifts
to right? and when gas price increases, does it affect supply or
demand? also, does supply shifts to left due to iincreased gas
price?
Please let me know as soon as possible.
When we formed the construction contract, do we need the margin percentage for the percentage-of-completion method?...
When we formed the construction contract, do we need the margin
percentage for the percentage-of-completion method? I am trying to
calculate the revenue. I have information about the estimated cost,
cost incurred per year, the finalized cost, project years, and
margin. However, I am not sure it is necessary. It said that the
worker wants to add a margin of % on its cost estimate.
Can anyone help me to use an example to explain to me?
Make Turner’s 2021 journal entries using the percentage-of-completion method.
Turner, Inc. began work on a $7,000,000 contract in 2021 to construct an office building. During 2021, Turner, Inc. incurred costs of $1,700,000, billed its customers for $1,200,000, and collected $960,000. At December 31, 2021, the estimated future costs to complete the project total $3,300,000. Make Turner’s 2021 journal entries using the percentage-of-completion method.
Nash Construction Company uses the percentage-of-completion method of accounting. In 2017, Nash began work under contract...
Nash Construction Company uses the percentage-of-completion
method of accounting. In 2017, Nash began work under contract
#E2-D2, which provided for a contract price of $2,234,000. Other
details follow:
2017
2018
Costs incurred during the year
$615,980
$1,420,000
Estimated costs to complete, as of December 31
1,005,020
–0–
Billings to date
413,000
2,234,000
Collections during the year
351,000
1,530,000
Prepare a complete set of journal entries for 2017 (using the
percentage-of-completion method). (Credit account
titles are automatically indented when amount is...
Long‐term contract based on percentage of completion method Jim’s Construction Co. has a $6,800,000 contract which...
Long‐term contract based on
percentage of completion method
Jim’s Construction Co. has a
$6,800,000 contract which began on January 1, 2015 to build a new
football stadium with an expected completion date of October 31,
2017. The following table provides information gathered during the
construction period. Jim uses the percentage completion method
to
account for this contract.
2015
2016
2017
Construction costs incurred during the year
2,040,000
2,932,500
1,657,500
Estimated costs to complete
3,060,000
1,657,500
0
Billings during the...
Widjaja Compay is accounting for a long term construction contract using the percentage of completion method....
Widjaja Compay is accounting for a long term construction
contract using the percentage of completion method. It is a 4 year
contract that is currently in its second year. The latest estimates
of contact costs indicate that the contact will be completed at a
profit to the company.
Based on this information please answer the following:
1 What theoretical justification is there or the Widjaja
Company's use of the percentage-of-completion method
2 Discuss how the progress billings will be accounted...
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