Rainbow Builders, Inc., is a reputed construction company. During 2018, Rainbow Company started a construction job...
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Rainbow Builders, Inc., is a reputed construction company. During 2018, Rainbow Company started a construction job with a contract price of $1,600,000 to build a commercial building. The job was completed in 2020. The following information is available. Cost incurred to date Estimated costs to complete Billing to date Collections to date 2018 $400,000 600,000 300,000 270,000 2019 $825,000 275,000 900,000 810,000 2020 $1,070,000 -0- 1,600,000 1,425,000 Required: 1.Compute the amount of gross profit to be recognized each year, assuming the competed- contract method is used. amount of gross profit by percentage-of-completion method 2018 Contract price Actual cost incurred during year Actual prior year costs Actual costs up to date Estimated costs up to completion Total estimated costs % of completion Revenue Recognized Less Revenue Recognized in previous year Revenue Recognized for current year Gross profit Recognized for current year $ GAGAGASASS $ $ $ $ $ SA $ SA $ $ SA GA $ 2019 1,600,000.00 $ 1,600,000.00 $ 400,000.00 $ 825,000.00 $ $ 400,000.00 $ 1,225,000.00 $ 275,000.00 $ 1,500,000.00 $ 400,000.00 $ 600,000.00 $ 1,000,000.00 $ 40% 640,000.00 $ $ 640,000.00 $ 240,000.00 $ 82% 1,306,666.67 $ 640,000.00 $ 666,666.67 $ (158,333.33) $ 2020 1,600,000.00 1,070,000.00 825,000.00 1,895,000.00 1,895,000.00 100% 1,600,000.00 1,306,666.67 293,333.33 (776,666.67) Rainbow Builders, Inc., is a reputed construction company. During 2018, Rainbow Company started a construction job with a contract price of $1,600,000 to build a commercial building. The job was completed in 2020. The following information is available. Cost incurred to date Estimated costs to complete Billing to date Collections to date 2018 $400,000 600,000 300,000 270,000 2019 $825,000 275,000 900,000 810,000 2020 $1,070,000 -0- 1,600,000 1,425,000 Required: 1.Compute the amount of gross profit to be recognized each year, assuming the competed- contract method is used. amount of gross profit by percentage-of-completion method 2018 Contract price Actual cost incurred during year Actual prior year costs Actual costs up to date Estimated costs up to completion Total estimated costs % of completion Revenue Recognized Less Revenue Recognized in previous year Revenue Recognized for current year Gross profit Recognized for current year $ GAGAGASASS $ $ $ $ $ SA $ SA $ $ SA GA $ 2019 1,600,000.00 $ 1,600,000.00 $ 400,000.00 $ 825,000.00 $ $ 400,000.00 $ 1,225,000.00 $ 275,000.00 $ 1,500,000.00 $ 400,000.00 $ 600,000.00 $ 1,000,000.00 $ 40% 640,000.00 $ $ 640,000.00 $ 240,000.00 $ 82% 1,306,666.67 $ 640,000.00 $ 666,666.67 $ (158,333.33) $ 2020 1,600,000.00 1,070,000.00 825,000.00 1,895,000.00 1,895,000.00 100% 1,600,000.00 1,306,666.67 293,333.33 (776,666.67)
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Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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