Hart Construction which has a calendar year end, has entered into a non-cancellable fixed priced contract...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Hart Construction which has a calendar year end, has entered into a non-cancellable fixed priced contract of $7,500,000 beginning January 1, 2018 to build a parking complex. It has been estimated that the parking complex will be complete by September 30, 2020. The following data pertains to the construction period: Costs during the year Estimated costs to complete Progress Billings 2018 $ 3,200,000 $ 3,300,000 $ 2,700,000 2019 $ 2,700,000 $ 1,000,000 $ 2,750,000 2020 $ 1,700,000 $0 $ 2,050,000 Required: A) Determine the revenue and profit/loss that should be recorded on this contract in 2019. Prepare the journal entry. B) What is the balance in the CIP and the billings accounts by the end of 2019? How will they be presented in the balance sheet? C) Prepare the journal entries to record the revenue and profit/loss in 2020. D) Assume the company cannot measure its progress and has to use the completed contact method. Prepare the journal entries. Hart Construction which has a calendar year end, has entered into a non-cancellable fixed priced contract of $7,500,000 beginning January 1, 2018 to build a parking complex. It has been estimated that the parking complex will be complete by September 30, 2020. The following data pertains to the construction period: Costs during the year Estimated costs to complete Progress Billings 2018 $ 3,200,000 $ 3,300,000 $ 2,700,000 2019 $ 2,700,000 $ 1,000,000 $ 2,750,000 2020 $ 1,700,000 $0 $ 2,050,000 Required: A) Determine the revenue and profit/loss that should be recorded on this contract in 2019. Prepare the journal entry. B) What is the balance in the CIP and the billings accounts by the end of 2019? How will they be presented in the balance sheet? C) Prepare the journal entries to record the revenue and profit/loss in 2020. D) Assume the company cannot measure its progress and has to use the completed contact method. Prepare the journal entries.
Expert Answer:
Answer rating: 100% (QA)
Answer 1 Determine the revenue and profitloss that should be recorded ... View the full answer
Related Book For
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
Posted Date:
Students also viewed these accounting questions
-
Assume the facts given in P6.9 for Essan Construction Inc. except assume that at December 31, 2021, Essan estimates the costs to complete the road contract at $1,050,000 instead of $600,000....
-
Essan Construction Inc., which has a calendar year end, has entered into a non-cancellable fixed price contract for $2.8 million beginning September 1, 2020, to build a road for a municipality. It...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Fox Erasing has a system of internal control with the following procedures. Match the procedure to the corresponding internal control principle. Procedure Internal Control Principle A. Establish...
-
A global manufacturer of electrical switching equipment (ESE) is considering outsourcing the manufacturing of an electrical breaker used in the manufacturing of switch boards. The company estimates...
-
Show that every multiple of the identity commutes with every square matrix. Are there other matrices that commute with all square matrices?
-
Why might deep green environmentalists favour the presentation of corporate information in ecological accounts but reject disclosures in environmentally adjusted financial accounts?
-
Granger Service Company, Inc., was organized by Ted Granger and five other investors. The following activities occurred during the year: a. Received $70,000 cash from the investors; each was issued...
-
Provide an analysis of which three markets (not listed in Exhibit 3) are the most attractive choices for GENICON based on non-financial data, such as: Ease of Doing Business Rankings (...
-
4. Assume a 60-day T-bill, P = $9,700, face value is $10,000, (a) Calculate the bond equivalent yield? (b) Calculate the yield on a bank discount basis? (c) Calculate the effective annual rate...
-
Description of the overall business processes impacted by the ERP system in FedEx company including comparison between the processes before and after the ERP system.(750word) Analyse each of the...
-
a. What factors are relevant in controlling beta risk? b. Indicate the formula for controlling this risk.
-
Explain the meaning of the following terms: (i) interim examination (ii) final examination (iii) inconsistent audit evidence (iv) systems-based evidence (v) third-party evidence (vi) persuasive...
-
How does the auditor control the risk of rejecting a fairly stated book value?
-
Go to the Employee Benefit Research Institute s website. As an employee, what topics discussed concern you the most, and why? From an employer s perspective, what topics concern you the most, and...
-
How should the objective of a variable sampling plan be stated in a two-tail test?
-
True or False? 1. Compared to risky investments, the opportunity cost of capital is lower for safe investments. 2. All projects with an IRR greater than 18% are good projects, and we should undertake...
-
For each of the following transactions, indicate whether it increases, decreases, or has no effect on the following financial ratios: current ratio, debt-to-equity ratio, profit margin ratio, and...
-
Zephyr Corporation began operations on January 1, 2017. Recently the corporation has had several unusual accounting problems related to the presentation of its income statement for financial...
-
Sherry Tsang has just started up a small corporation that produces clothing. She has applied for and received a government grant. The grant will automatically be renewed as long as the business shows...
-
The following financial statement was prepared by employees of Intellisys Corporation, which follows ASPE: Intellisys Corporation Income Statement Year Ended December 31, 2020 Sales revenue Gross...
-
a. Nonlinearity in mass b. Nonlinearity in damping c. Linear equation d. Nonlinearity in spring \(\ddot{x}+f \frac{\dot{x}}{|\dot{x}|}+\omega_{n}^{2} x=0\)
-
The equation of motion of a nonlinear system is given by \[\ddot{x}+c \dot{x}+k_{1} x+k_{2} x^{2}=a \cos 2 \omega t\] Investigate the subharmonic solution of order 2 for this system.
-
Prove that, for the system considered in Section 13.5.1, the minimum value of \(\omega^{2}\) for which the amplitude of subharmonic oscillations \(A\) will have a real value is given by...
Study smarter with the SolutionInn App