On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,175,000. During 2021, costs of $2,070,000 were incurred, with estimated costs of $4,070,000 yet to be incurred. Billings of $2,584,000 were sent, and cash collected was $2,320,000. In 2022, costs incurred were $2,584,000 with remaining costs estimated to be $3,705,000. 2022 billings were $2,834,000, and $2,545,000 cash was collected. The project was completed in 2023 after additional costs of $3,870,000 were incurred. The company's fiscal year-end Is December 31. This project does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. 2a. Prepare Journal entries for 2021 to record the transactions described (credit "various accounts" for construction costs incurred). 2b. Prepare journal entries for 2022 to record the transactions described (credit "various accounts" for construction costs incurred). 3a. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2021. 3b. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2022. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 3B Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. (Loss amounts should be indicated with a minus sign.) Year 2021 2022 2023 Total Revenue recognized $ Req 28 Gross profit (loss) recognized 0 $ Req 3A 0 On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,175,000. During 2021, costs of $2,070,000 were incurred, with estimated costs of $4,070,000 yet to be incurred. Billings of $2,584,000 were sent, and cash collected was $2,320,000. In 2022, costs incurred were $2,584,000 with remaining costs estimated to be $3,705,000. 2022 billings were $2,834,000, and $2,545,000 cash was collected. The project was completed in 2023 after additional costs of $3,870,000 were incurred. The company's fiscal year-end Is December 31. This project does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. 2a. Prepare Journal entries for 2021 to record the transactions described (credit "various accounts" for construction costs incurred). 2b. Prepare journal entries for 2022 to record the transactions described (credit "various accounts" for construction costs incurred). 3a. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2021. 3b. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2022. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 3B Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. (Loss amounts should be indicated with a minus sign.) Year 2021 2022 2023 Total Revenue recognized $ Req 28 Gross profit (loss) recognized 0 $ Req 3A 0
Expert Answer:
Answer rating: 100% (QA)
1 Revenue and gross profit or loss to be recognized in each of the th... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe , Mark Nelson, Wayne Thomas
Posted Date:
Students also viewed these accounting questions
-
On February 1, 2011, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,000,000. During 2011, costs of $2,000,000 were incurred with...
-
On February 1, 2011, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,000,000. During 2011, costs of $2,000,000 were incurred with...
-
On February 1, 2013, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,000,000. During 2013, costs of $2,000,000 were incurred with...
-
What is the asset-liability time mismatch that all banks face?
-
In a work center, six machinists were uniquely qualified to operate any one of the five machines in the shop. The work center had considerable backlog, and all five machines were kept busy at all...
-
How are scarce housing resources allocated when a rent ceiling is in place?
-
Some members of the financial community allege that corporate managers manage their companys reported accounting results. Discuss the possible motivations behind this behavior.Can you envision a...
-
Following the Special Committee investigation in late 2003, Le-Nature's dismissed EY and retained BDO Seidman to serve as its independent audit firm. What safeguards are in place to mitigate the...
-
County A will export [ Select ] and import [ Select ] because [ Select ] . County B will export [ Select ] and import [ Select ] because [ Select ]
-
On November 10, 2020, Singh Electronics began to buy and resell scanners for $55 each. Singh uses the perpetual system to account for inventories. The scanners are covered under a warranty that...
-
The lowered tax rate diminishes the future tax-saving value of NOLs and tax credits, impacting their strategic utilization for reducing future tax liabilities. Additionally, the TCJA prompts a...
-
Sheridan had the following account balances at December 31, 2023: (b) Cash $24,000 Accumulated Depreciation, Equipment 25,000 Accounts Receivable 25,000 Wages Payable 6,000 Supplies 50,000 Accounts...
-
Production costs of the Finishing Department in June in Wildhorse Company are materials $15,616, labor $35,990, and overhead $21,960. Equivalent units of production are materials 24,400 and...
-
Please read the following story below about a Michigan physician who was enticed to write prescriptions for the strong opioid narcotic Subsys, made by the pharmaceutical company Insys. Michigan-based...
-
Writing a detailed written assessment that challenges the traditional legal regimes governing the use of military force, addressing key jus ad bellum and jus in bello legal concerns along with their...
-
Art has a profound effect on our lives: everyone is emotionally affected by the art they see most often, and most people who are surrounded only by bad art suffer a loss in aesthetic discernment....
-
The Eat My Words SMILE and SCRATCH Test TM were devised in order to test a. the user experience of a company's line of products Ob. the effectiveness of a company's product pitch Oc. the...
-
Time Travel Publishing was recently organized. The company issued common stock to an attorney who provided legal services worth $25,000 to help organize the corporation. Time Travel also issued...
-
Identify the accounting concept that was violated in each of the following situations. 1. Astro Turf Company recognize an expense, cost of goods sold, in the period the product is manufactured. 2....
-
On January 1, 2021, David Mest Communications granted restricted stock units (RSUs) representing 30 million of its $1 par common shares to executives, subject to forfeiture if employment is...
-
WebHelper Inc. acquired 100% of the outstanding stock of Silicon Chips Corporation (SCC) for $45 million, of which $15 million was allocated to goodwill. At the end of the current fiscal year, the...
-
Describe the function of a dark pool.
-
Explain the difference between primary and secondary markets.
-
How has the ownership of UK shares changed over the past 50 years?
Study smarter with the SolutionInn App