The following data relates to a construction job started by JP Inc.: Total contract price Actual cost incurred in 2020 Estimated remaining costs Billings to customers in 2020 Collections from customers in 2020 P1,500,000 300,000 600,000 450,000 150,000 How much gross profit is to be recognized by JP Inc. using Percentage-of-Completion Method and Cost Recovery Method, respectively?

The following data relates to a construction job started by JP Inc.: Total contract price Actual cost incurred in 2020 Estimated remaining costs Billings to customers in 2020 Collections from customers in 2020 P1,500,000 300,000 600,000 450,000 150,000 How much gross profit is to be recognized by JP Inc. using Percentage-of-Completion Method and Cost Recovery Method, respectively?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Use the following information for the next two questions: Bass Co. appropriately uses the cost-to-cost method in measuring construction contract with a customer. its progress on Information on this contract, which was completed in 20x3, is a shown below: 20x1 20x2 20x3 20,000,000 20,000,000 20,000,000 Transaction price Profit each year Costs incurred each year (200,000) 8,200,000 400,000 1,400,000 3,600,000 (AICPA - Adapted) 1. 10. How much are the contract costs incurred in 20x2? a. 5,800,000 b. 6,200,000 c. 6,600,000 d. 10,200,000 11. How much are the estimated additional costs to complete as of December 31, 20x2? a. 5,400,000 b. 6,800,000 c. 7,200,000 d. 8,600,000
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.
1. Prepare a schedule showing the revenue, cost and gross profit earned each year using thepercentage of completion method, using the engineer’s estimate as a measure ofcompletion.2. Prepare all journal entries required to reflect the contract3. Prepare journal entries for 2020 assuming zero profit method is used.
A Company has used the cost-to-cost percentage-of-completion (Over time) method of recognizing revenue. The following information regarding a recently completed building project for which the total contract price was P2,000,000. Description Gross profit (loss) Cost incurred each year 360,000 ? 2018 2019 P40,000 P140,000 P(20,000) 2020 820,000 What was the total estimated gross profit by the end of 2019?
Required: Calculate the following: a. estimated total cost of completion, b. estimated profit on completion, c. estimated profit to date. Lim Construction is building Univ tower Near Unicity, Sibu. The date of commencement of construction is 1 January 2021 and the date of completion is on 31 December 2026. During the year ending 31 December 2021, the following information reported: RM Contract price Plant sent to site Purchasing of materials Wages paid Direct expenses Overhead incurred 13,000,000.00 2,000,000.00 3,000,000.00 1,500,000.00 1,000,000.00 500,000.00 At the end of December 2021, the following available: 1. Material unused on site amounted RM1,000,000.00 2. Wages owing RM500,000.00 3. Value of work certified RM6,000,000.00 4. Cost of work done but not yet certified amounted to RM500,000.00 5. Plant at site RM1,500,000.00
NEED SOLUTION ASAP PLEASE! THANK YOU A Company has used the cost-to-cost percentage-of-completion (Over time) method of recognizing revenue. The following information regarding a recently completed building project for which the total contract price was P2,000,000. Description 2018 2019 2020 Gross profit (loss) P40,000 P140,000 P(20,000) Cost incurred each year 360,000 ? 820,000 What was the total estimated gross profit by the end of 2019?
Blossom Construction Company uses the percentage-of-completion method of accounting. In 2021, Blossom began work on a contract it had received which provided for a contract price of $47500000. Other details follow: 2021 Costs incurred during the year $22000000 Estimated costs to complete as of December 31 16000000 Billings during the year 21500000 Collections during the year 10500000 What should be the gross profit recognized in 2021?
For a construction firm using the cost recovery method, if costs exceed billings ons some contracts by 1,000,000 and billings exceed costs by 800,000 on others, the contracts should ordinarily be reported as a? a. current asset of 200,000 b. current liability of 200,000 c. current asset of 1,000,000 less a contra-current asset of 800,000 d. current asset of 1,000,000 and a current liability of 800,000
Crane Constructors, Inc. has consistently used the percentage-of-completion method of recognizing income. In 2021, Crane started work on a $ 61740000 construction contract that was completed in 2022. The following information was taken from Crane's 2021 accounting records: Progress billings $ 19404000 Costs incurred 18522000 Collections 12096000 Estimated costs to complete 37044000 What amount of gross profit should Crane have recognized in 2021 on this contract? $ 3087000 $ 6174000 $ 4116000 $ 2058000
Question: Assume that an architect hired by the company made the following estimates of the project’s percentage of completion at 50%, 90% and 100% at the end of 2020,2021, and 2022, respectively, what is the realized gross profit for 2021, using percentage of completion method – output measures as determined by estimates made by the architect?
Widjaja Company 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 total contract costs indicate that the contract will be completed at a profit to Widjaja Company. Instructions a. What theoretical justification is there for Widjaja Company's use of the percentage-of-completion method? b. How would progress billings be accounted for? Include in your discussion the classification of progress billings in Widjaja Company financial statements. c. How would the income recognized in the second year of the 4-year contract be determined using the cost-to-cost method of determining percentage of completion? d. What would be the effect on earnings per share in the second year of the 4-year contract of using the percentage-of-completion method instead of the completed-contract method? Discuss.
For a construction firm using the cost recovery method, if costs exceed billings on some contracts by P1,000,000 and billings exceed costs by P800,000 on others, the contracts should ordinarily be reported as a a. Current asset of P1,000,000 and a current liability of P800,000 b. current asset of 200,000