29) Horner Construction uses the method. In percentage-of-completion 2024, Honer began work on a contract for $22,000,000; it was completed in 2025. The following cost data pertain to this contract: December 31 Year Ended 2024 2025 Cost Incurred during the year $5,600,000 Estimated costs to complete at the end of year $5,200,000 The amount of gross profit to be recognized on the income statement for the year ended December 31, 2025 is A)S8.600.000 INCORRECT $7,800,000

29) Horner Construction uses the method. In percentage-of-completion 2024, Honer began work on a contract for $22,000,000; it was completed in 2025. The following cost data pertain to this contract: December 31 Year Ended 2024 2025 Cost Incurred during the year $5,600,000 Estimated costs to complete at the end of year $5,200,000 The amount of gross profit to be recognized on the income statement for the year ended December 31, 2025 is A)S8.600.000 INCORRECT $7,800,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Cullumber Construction Co. uses the percentage-of-completion method. In 2024, Cullumber began work on a contract for $23200000; it was completed in 2025. The following cost data pertain to this contract: Year Ended December 31 2024 2025 Cost incurred during the year $8736000 $5720000 Estimated costs to complete at the end of year 5824000 The amount of gross profit to be recognized on the income statement for the year ended December 31, 2025 is ○ $3456000. ○ $8744000. $2920000. $3560000.
The Heart Co. has just completed a 4-year contract to which the following relate: Labor and Materials costs 1,800,000 Machinery Cost Initial Design Costs Disposal proceeds of machinery 50,000 600,000 100,000 According to IFRS 15, What are the total contract cost?
Jason Construction began work on a contract for $3,700,000. Costs which have been incurred during the year =$1,800,000Estimated costs to complete as of December 31= 1,200,000Billings done during the year1,650,000Collections during the year 975,000 The company uses percentage of Completion method. Calculate gross profit for the year.
Sheridan Construction Co. uses the percentage-of-completion method. In 2024, Sheridan began work on a contract for $21300000; it was completed in 2025. The following cost data pertain to this contract: Cost incurred during the year Estimated costs to complete at the end of year Year Ended December 31 $8516000. $2990000. $3680000. $3684000. 2024 $7254000 4836000 2025 $5530000 The amount of gross profit to be recognized on the income statement for the year ended December 31, 2025 is
Monroe Construction Company uses the percentage-of-completion method of accounting.In 20x4, Monroe began work on a contract it had received which provided for a contract price of $15,000,000. Other details follow:Costs incurred during the year $7,200,000Estimated costs to complete as of December 31 4,800,000Billings during the year 6,600,000Collections during the year 3,900,000What should be the gross profit recognized in 20x4?
Kiner, Inc. began work in 20x4 on a contract for $8,400,000. Other data are as follows: 20x4 20x5Costs incurred to date $3,600,000 $5,600,000Estimated costs to complete 2,400,000 —Billings during the year 2,800,000 8,400,000Collections to year 2,000,000 7,200,000 1. If kiner uses the cost recovery method (point in time), the gross profit to be recognized in 20x5 is? 2. If Kiner uses the percentage-of-completion (over time) method, the gross profit to be recognized in 20x4 is?
15. In 20x1, Espresso Co. started work on a long-term construction contract. Espresso Co. accumulates costs and recognized profits using the Information on the contract is as follows: "Construction in progress" account. 20x1 20x2 Accounts receivable, ending balances Costs incurred each year 250,000 750,000 262,500 480,000 Construction in progress, ending balances Progress billings, cumulative balances 305,000 910,000 250,000 1,050,000 Espresso bills the customer based on the project's stage of completion, which is computed using the costs incurred. How much are the profit, revenue and total collections in 20x2, respectively? a. 125,000; 605,000; 300,000 b. 149,000; 640,000; 326,000 c. 50,000; 242,000; 120,000 d. 150,000; 620,000; 300,000
Sonex Construction Co. incurred the following costs and made the following estimates in the first two years of a three-year construction project. Year 1 Year2 Actual current year costs incurred $1,200,000 $1,000,000 Estimated costs to complete contract 1,800,000 550,000 Contract price 5,000,000 5,000,000 Billings and collections 2,500,000 1,500,000 Using the percentage of completion method of accounting, what amount would Sonex show as either a net current asset or a net current liability as of the end of Year 2 due to its construction activity? Multiple Choice $4,000,000 asset О $1,800,000 asset О $1,500,000 liability.
2 During 20xl, Cord Builders, Inc. started work on a P9,000.00 fixed-price construction contract. Cord appropriately uses the percentage-of-completion method in accounting for the contract. Cord's accounting records disclosed the following 20x1 20x2 Cumulative contract costs incurred 6.300,000 8,100,000 3,900,000 Estimated total costs at completion 7,800,000 How much are the revenue and cost of construction recognized 20x2, respectively? a. 2,220,000; 2,150,000 b. 2,520,000; 2,400,000 (AICPA-Adapted) c. 2,520,000; 2,420,000 d. 2,500,000; 2,400,000
Crane Construction Co. uses the percentage-of-completion method. In 2021, Crane began work on a contract for $24475000; it was completed in 2022. The following cost data pertain to this contract: Year Ended December 31 2021 2022 Cost incurred during the year $8350000 $6150000 Estimated costs to complete at the end of year 5739000 If the completed-contract method of accounting was used, the amount of gross profit to be recognized for years 2021 and 2022 would be 2021 2022 $9975000. $(411000). $0. $10386000. $10386000. $0. $0. $9975000. O O
Tyro Construction Company has two projects, for which it reported, as of December 31, 20x5, the following information: In thousand pesos: Project A Project B Contract Price P 4,800 860 20x4: Costs incurred P 3,400 Percent completed 75% 20x5: Costs incurred P 1,250 140 Percent Completed 25% 15% Using the percentage-of-completion (over time) method of revenue recognition, gross profit on Project A to be recognized in 20x4 would be: a. P 200,000 ] b. P 300,000
Zent construction has an contract for $3,700,000. Other details follow:Costs incurred during the year= $1,800,000Estimated costs to complete as of December 31= 1,200,000Billings during the year=1,650,000Collections during the year= 975,000 It uses the percentage of completion method For calendar 2020, what should report gross profit of?