Aylmer Construction Company entered into a contract to build a hospital for the City of London....

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Aylmer Construction Company entered into a contract to build a hospital for the City of London. The contract began on January 1, Y3. It is estimated that construction will be complete at December 31, Y5. Aylmer has a calendar year end. The following information relates to the construction project: Total Contract Price Costs to date Estimated costs to complete Progress billings Cash collected S 5,630,160 Y3 Y4 Y5 $ 511,833 $ 1,973,385 $ 3,038,872 2,441,428 1,249,488 940,487 2,815,080 1,565,592 1,037,075 2,641,969 1,951,116 REQUIRED 1. Using the percentage-of-completion method, calculate the estimated gross profit that would be recognized each year of the construction period. Round to the nearest dollar. 2. Using the percentage-of-completion method, prepare ALL required journal entries for Y3, Y4 and Y5. 3. Using the percentage-of-completion method, indicate the Y3, Y4 and Y5 balances for: a. Accounts Receivable. b. Construction in Process. c. Billings on Construction. 4. Repeat requirements 1 thru 4 - if the completed contract method were used. Aylmer Construction Company entered into a contract to build a hospital for the City of London. The contract began on January 1, Y3. It is estimated that construction will be complete at December 31, Y5. Aylmer has a calendar year end. The following information relates to the construction project: Total Contract Price Costs to date Estimated costs to complete Progress billings Cash collected S 5,630,160 Y3 Y4 Y5 $ 511,833 $ 1,973,385 $ 3,038,872 2,441,428 1,249,488 940,487 2,815,080 1,565,592 1,037,075 2,641,969 1,951,116 REQUIRED 1. Using the percentage-of-completion method, calculate the estimated gross profit that would be recognized each year of the construction period. Round to the nearest dollar. 2. Using the percentage-of-completion method, prepare ALL required journal entries for Y3, Y4 and Y5. 3. Using the percentage-of-completion method, indicate the Y3, Y4 and Y5 balances for: a. Accounts Receivable. b. Construction in Process. c. Billings on Construction. 4. Repeat requirements 1 thru 4 - if the completed contract method were used.

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Answer 1 Estimated Gross Profit Calculation using PercentageofCompletion Method Y3 Total Contract Pr... View the full answer