P18-3, Recognition of lettuce and Entries on Long-term Contract
On March 1, 2010, Chance conjunction entered into a hold to build an apartment building. It is estimated that the building pull up stakes cost $2,000,000 and will take 3 long time to complete. The contract price was $3,000,000 The information that follows pertains to the construction period: 2010 $600,000 1,400,000 1,050,000 950,000 2011 $1,560,000 520,000 2,000,000 1,950,000 2012 $2,100,000 0 3,000,000 2,850,000
cost to ascertain: Estimated costs to complete: Progress billing to date: Cash collected to date:
Instructions: (a) Compute the total of gross profit to be accepted each year assuming the percentage-of-completion method is used. Gross profit recognized in: 2010 $3,000,000 $600,000 1,400,000 $1,560,000 520,000 2011 $3,000,000 $2,100,000 2,080,000 920,000 75% 690,000 300,000 $390,000 2,100,000 900,000 100% 900,000 690,000 $210,000 2012 $3,000,000
Contract price cost: Costs to date Estimated costs to complete Total estimated profit fortune completed to date Total gross profit recognized Less: GP recognized in previous years Gross profit recognized in current year
2,000,000 1,000,000 30% 300,000 0 $300,000
(b) explicate all necessary journal entries for 2012.
expression in abut Materials, Cash, Payables, etc. Accounts Receivable Billings on verbalism in Progress Cash Accounts Receivable anatomical structure in Process (gross profit) Construction Expenses Revenue from Long-Term Contracts Billings on Construction in Process Construction in Process 540,000 540,000 1,000,000 1,000,000 900,000 900,000 210,000 540,000 750,000 5,160,000 5,160,000
(c) Prepare a partial balance sheet for December 31, 2011, cover the balances in the receivables and inventory accounts. CHANCE COMPANY Balance public opinion poll (Partial) December 31, 2011 Current assets: Accounts receivable Inventories Construction in Process Less: Billings Costs and recognized gross profit in excess of billings...If you want to get a full essay, swan it on our website: Ordercustompaper.com
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