Question
In: Accounting
On July 1, 2017, Torvill Construction Company Inc. contracted to build an office building for Gumbel...
On July 1, 2017, Torvill Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,900,000. On July 1, Torvill estimated that it would take between 2 and 3 years to complete the building. On December 31, 2019, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2017, 2018, and 2019. At 12/31/17 At 12/31/18 At 12/31/19 Contract costs incurred to date $ 300,000 $1,200,000 $2,100,000 Estimated costs to complete the contract 1,200,000 800,000 -0- Billings to Gumbel 300,000 1,100,000 1,850,000 Instructions (a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2017, 2018, and 2019. (Ignore income taxes.) (b) Using the completed-contract method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2017, 2018, and 2019. (Ignore income taxes.)
Solutions
ekkarill92 answered 1 year agoRelated Solutions
On July 1, 2017, Skysong Construction Company Inc. contracted to build an office building for Gumbel...
On July 1, 2017, Skysong Construction Company Inc. contracted to
build an office building for Gumbel Corp. for a total contract
price of $1,910,000. On July 1, Skysong estimated that it would
take between 2 and 3 years to complete the building. On December
31, 2019, the building was deemed substantially completed.
Following are accumulated contract costs incurred, estimated costs
to complete the contract, and accumulated billings to Gumbel for
2017, 2018, and 2019.
At
12/31/17
At
12/31/18
At
12/31/19...
On July 1, 2017, Headland Construction Company Inc. contracted to build an office building for Gumbel...
On July 1, 2017, Headland Construction Company Inc. contracted
to build an office building for Gumbel Corp. for a total contract
price of $1,890,000. On July 1, Headland estimated that it would
take between 2 and 3 years to complete the building. On December
31, 2019, the building was deemed substantially completed.
Following are accumulated contract costs incurred, estimated costs
to complete the contract, and accumulated billings to Gumbel for
2017, 2018, and 2019.
At
12/31/17
At
12/31/18
At
12/31/19...
On July 1, 2017, Sheridan Construction Company Inc. contracted to build an office building for Gumbel...
On July 1, 2017, Sheridan Construction Company Inc. contracted
to build an office building for Gumbel Corp. for a total contract
price of $1,880,000. On July 1, Sheridan estimated that it would
take between 2 and 3 years to complete the building. On December
31, 2019, the building was deemed substantially completed.
Following are accumulated contract costs incurred, estimated costs
to complete the contract, and accumulated billings to Gumbel for
2017, 2018, and 2019.
At
12/31/17
At
12/31/18
At
12/31/19...
On July 1, 2017, Torvill Construction Company Inc. contracted to build an office building for Gumbel...
On July 1, 2017, Torvill Construction Company Inc. contracted to
build an office building for Gumbel Corp. for a total contract
price of $1,900,000. On July 1, Torvill estimated that it would
take between 2 and 3 years to complete the building. On December
31, 2019, the building was deemed substantially completed.
Following are accumulated contract costs incurred, estimated costs
to complete the contract, and accumulated billings to Gumbel for
2017, 2018, and 2019. At 12/31/17 At 12/31/18 At 12/31/19...
Problem 18-11 On July 1, 2017, Vaughn Construction Company Inc. contracted to build an office building...
Problem 18-11
On July 1, 2017, Vaughn Construction Company Inc. contracted to
build an office building for Gumbel Corp. for a total contract
price of $1,890,000. On July 1, Vaughn estimated that it would take
between 2 and 3 years to complete the building. On December 31,
2019, the building was deemed substantially completed. Following
are accumulated contract costs incurred, estimated costs to
complete the contract, and accumulated billings to Gumbel for 2017,
2018, and 2019.
At
12/31/17
At
12/31/18...
Problem 18-11 On July 1, 2017, Nash Construction Company Inc. contracted to build an office building...
Problem 18-11
On July 1, 2017, Nash Construction Company Inc. contracted to
build an office building for Gumbel Corp. for a total contract
price of $1,890,000. On July 1, Nash estimated that it would take
between 2 and 3 years to complete the building. On December 31,
2019, the building was deemed substantially completed. Following
are accumulated contract costs incurred, estimated costs to
complete the contract, and accumulated billings to Gumbel for 2017,
2018, and 2019.
At
12/31/17
At
12/31/18...
On July 1, 2020, Torvill Construction Company Inc. contracted to build an office building for Gabriella Corp
Construction Contract Accounting as per Percentage-of-Completion Method & Completed Contract Method.
Problem Four: Long-Term Contract
On July 1, 2020, Torvill Construction Company Inc. contracted to build an office building for Gabriella Corp. for a total contract price of S2,000,000. On July 1, Torvill estimated that it would take between 2 and 3 years to complete the building. On December 31, 2022, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated...
On June 1, 2020, Roman Construction Company Inc. contracted to build an office building for Sicily...
On June 1, 2020, Roman Construction Company Inc. contracted to
build an office building for Sicily Corp. for a total contract
price of $2,600,000. On July 1, Roman estimated that it would take
between 2 and 3 years to complete the building. On December 31,
2022, the building was deemed substantially completed. Following
are accumulated contract costs incurred, estimated costs to
complete the contract, and accumulated billings to Sicily 2020,
2021, and 2022:
At
At
At
12/31/2020
12/31/2021
12/31/2022
Contract...
Chiefs Construction Company has contracted to build an office building. The construction is scheduled to begin...
Chiefs Construction Company has contracted to build an office
building. The construction is scheduled to begin on January 1,
2020, and the estimated time of completion is July 1, 2023. The
building cost is estimated to be $20,000,000 and will be billed at
$24,000,000. The following data relate to the construction
period:
2020
2021
2022
2023
Cost to date
5,500,000
10,000,000
13,500,000
20,000,000
Estimated cost to complete
14,500,000
10,000,000
6,500,000
-0-
Progress billings to date
3,000,000
9,000,000
14,000,000
24,000,000
Cash...
Beavis Construction Company was the low bidder on a construction project to build an office building...
Beavis Construction Company was the low bidder on a construction
project to build an office building for $8,000,000. The project was
begun in 2017 and completed in 2019. Cost and other data are
presented below:
2017 2018 2019
Costs incurred during the year $ 1,500,000 $4,500,000
$1,550,000
Estimated costs to complete 4,500,000 1,500,000 -0-
Billings during the year 1,400,000 5,200,000 1,400,000
Cash collections during the year 1,000,000 4,000,000
3,000,000
Assume that Beavis recognizes revenue on this contract over time
according...
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