Nam Construction, a subcontractor, entered into a contract with the main contractor, Ming Company, on March...

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Nam Construction, a subcontractor, entered into a contract with the main contractor, Ming Company, on March 6, 2024, to provide civil engineering services at the contract fee of $10,000,000. The contract spans three years from 2024 to 2026. Costs incurred, estimated costs to complete at year-end, billings, and cash collections for the life of the contract are shown below: Costs incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2024 $4,800,000 4,200,000 3,300,000 2,800,000 2025 $2,200,000 2,050,000 3,200,000 3,000,000 2026 $1,800,000 3,500,000 3,700,000 Required: 1. Using costs as a measure of the extent to which performance obligations are satisfied over time, what is the percentage of completion at the end of 2024, 2025, and 2026? 2. How much revenue related to this contract will Nam report in its 2024, 2025, and 2026 income statements? 3. What is the amount of contract profit or loss to be recognized for the Ming contract in the 2024, 2025, and 2026 income statements? 4. Prepare all necessary journal entries for each of the years. Assume that construction costs are paid in cash. 5. Prepare a partial income statement to show the revenue and expenses arising from this contract in 2024, 2025, and 2026. 6. Prepare a partial but balanced statement of financial position at the end of 2024, 2025, and 2026 to show the items related to the contract, stating clearly contract asset or contract liability and other relevant accounts. Include cash balances and accumulated retained earnings. Nam Construction, a subcontractor, entered into a contract with the main contractor, Ming Company, on March 6, 2024, to provide civil engineering services at the contract fee of $10,000,000. The contract spans three years from 2024 to 2026. Costs incurred, estimated costs to complete at year-end, billings, and cash collections for the life of the contract are shown below: Costs incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2024 $4,800,000 4,200,000 3,300,000 2,800,000 2025 $2,200,000 2,050,000 3,200,000 3,000,000 2026 $1,800,000 3,500,000 3,700,000 Required: 1. Using costs as a measure of the extent to which performance obligations are satisfied over time, what is the percentage of completion at the end of 2024, 2025, and 2026? 2. How much revenue related to this contract will Nam report in its 2024, 2025, and 2026 income statements? 3. What is the amount of contract profit or loss to be recognized for the Ming contract in the 2024, 2025, and 2026 income statements? 4. Prepare all necessary journal entries for each of the years. Assume that construction costs are paid in cash. 5. Prepare a partial income statement to show the revenue and expenses arising from this contract in 2024, 2025, and 2026. 6. Prepare a partial but balanced statement of financial position at the end of 2024, 2025, and 2026 to show the items related to the contract, stating clearly contract asset or contract liability and other relevant accounts. Include cash balances and accumulated retained earnings.

Answer rating: 100% (QA)

1 Percentage of completion at the end of each year 2024 Costs incurred Total estimated cost 4800000 ... View the full answer