Sandhill Enterprises Ltd. has entered into a contract beginning in February 2023 to build two warehouses...
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Sandhill Enterprises Ltd. has entered into a contract beginning in February 2023 to build two warehouses for Tamarisk Structures Ltd. The contract is a non-cancellable fixed-price contract for $10 million. The following data pertain to the construction period (all figures in thousands). 2023 2024 Costs for the year $3,805 Estimated costs to complete 4,680 1,240 Progress billings for the year (non-refundable) 3,470 4,170 Cash collected for the year (a) 4,680 2025 1,170 -0- 2,660 3,200 4,220 2,880 The construction industry has experienced significant expansion, making construction materials and labour more costly than originally estimated. Sandhill finds it extremely difficult to estimate the costs to complete construction and therefore difficult to estimate the percentage complete. It must account for the construction project using the zero-profit method. SUPPORT Calculate the amount of the gross profit to be recognized each year of the contract. (Do not leave any answer field blank. Enter O for amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Sandhill Enterprises Ltd. has entered into a contract beginning in February 2023 to build two warehouses for Tamarisk Structures Ltd. The contract is a non-cancellable fixed-price contract for $10 million. The following data pertain to the construction period (all figures in thousands). 2023 2024 Costs for the year $3,805 Estimated costs to complete 4,680 1,240 Progress billings for the year (non-refundable) 3,470 4,170 Cash collected for the year (a) 4,680 2025 1,170 -0- 2,660 3,200 4,220 2,880 The construction industry has experienced significant expansion, making construction materials and labour more costly than originally estimated. Sandhill finds it extremely difficult to estimate the costs to complete construction and therefore difficult to estimate the percentage complete. It must account for the construction project using the zero-profit method. SUPPORT Calculate the amount of the gross profit to be recognized each year of the contract. (Do not leave any answer field blank. Enter O for amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
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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
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