The board of directors of Ogle Construction Company is meeting to choose between the completed-contract method...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The board of directors of Ogle Construction Company is meeting to choose between the completed-contract method and the percentage-of-completion method of accounting for long-term contracts in the company's financial statements. You have been engaged to assist Ogle's controller in the preparation of a presentation to be given at the board meeting. The controller provides you with the following information: 1. Ogle commenced doing business on January 1, 2018. 2. Construction activities for the year ended December 31, 2018, were as follows: Project A B с D E Total Contract Billings Through Cash Collections Price Through 12/31/18 $ 304,000 204,000 384,000 62,000 394,000 $1,348,000 $494,000 714,000 472,000 197,000 444,000 $2,321,000 12/31/18 $ 334,000 204,000 469,000 94,000 394,000 $1,495,000 Estimated Contract Costs Incurred Through Additional Costs to 12/31/18 Complete Contracts $ 95,000 434,000 -0- 91,000 78,500 $698,500 $418,000 186,000 344,000 117,000 314,000 $1,379,000 3. Each contract is with a different customer. 4. Any work remaining to be done on the contracts is expected to be completed in 2019. Compute the amount of income (or loss) before selling, general, and administrative expenses for the year ended December 31, 2018, which would be reported under: (1) The completed-contract method. $ (2) The percentage-of-completion method (based on estimated costs). $ Prepare the general journal entry to record revenue and gross profit on project B (second project) for 2018, assuming that the percentage-of-completion method is used. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Accounts Receivable Indicate the balances that would appear in the balance sheet at December 31, 2018 for the following accounts for Project D (fourth project), assuming that the percentage-of-completion method used. $ Billings on Construction in Process $ Construction in Process Debit $ Credit How would the balances in the accounts discussed in part (c) change (if at all) for Project D (fourth project), if the completed-contract method is used? If the completed-contract method is used the account balances Click if you would like to Show Work for this question: Open Show Work The board of directors of Ogle Construction Company is meeting to choose between the completed-contract method and the percentage-of-completion method of accounting for long-term contracts in the company's financial statements. You have been engaged to assist Ogle's controller in the preparation of a presentation to be given at the board meeting. The controller provides you with the following information: 1. Ogle commenced doing business on January 1, 2018. 2. Construction activities for the year ended December 31, 2018, were as follows: Project A B с D E Total Contract Billings Through Cash Collections Price Through 12/31/18 $ 304,000 204,000 384,000 62,000 394,000 $1,348,000 $494,000 714,000 472,000 197,000 444,000 $2,321,000 12/31/18 $ 334,000 204,000 469,000 94,000 394,000 $1,495,000 Estimated Contract Costs Incurred Through Additional Costs to 12/31/18 Complete Contracts $ 95,000 434,000 -0- 91,000 78,500 $698,500 $418,000 186,000 344,000 117,000 314,000 $1,379,000 3. Each contract is with a different customer. 4. Any work remaining to be done on the contracts is expected to be completed in 2019. Compute the amount of income (or loss) before selling, general, and administrative expenses for the year ended December 31, 2018, which would be reported under: (1) The completed-contract method. $ (2) The percentage-of-completion method (based on estimated costs). $ Prepare the general journal entry to record revenue and gross profit on project B (second project) for 2018, assuming that the percentage-of-completion method is used. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Accounts Receivable Indicate the balances that would appear in the balance sheet at December 31, 2018 for the following accounts for Project D (fourth project), assuming that the percentage-of-completion method used. $ Billings on Construction in Process $ Construction in Process Debit $ Credit How would the balances in the accounts discussed in part (c) change (if at all) for Project D (fourth project), if the completed-contract method is used? If the completed-contract method is used the account balances Click if you would like to Show Work for this question: Open Show Work
Expert Answer:
Answer rating: 100% (QA)
To determine the income or loss before selling general and administrative expenses for the year ende... View the full answer
Related Book For
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver
Posted Date:
Students also viewed these accounting questions
-
The board of directors of Ogle Construction Company is meeting to choose between the completed-contract method and the percentage-of-completion method of accounting for long-term contracts in the...
-
The board of directors of Sheridan Construction Company is meeting to choose between the completed-contract method and the percentage-of-completion method of accounting for long-term contracts in the...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Based on the illustration of an iPhone shown below, draw a system model for an iPhone. iPhone Components Flash memory. CPU Main circuit boards Communications GSM cell, WiFi, EDGE Battery Display...
-
Records of the Schwab New Products Co. show the following data relative to Product C: March 2 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325 units at $25.50...
-
Use the Substitution Formula in Theorem 7 to evaluate the integral. 0 7/12 6 tan 3x dx
-
Refer to the information in QS 19-16. The company sells its product for $50 per unit. Due to new regulations, the company must now incur $2 per unit of hazardous waste disposal costs and $8,500 per...
-
The Bonita Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $60 a night. Operating costs are as follows. Salaries ...... $8,800 per month Utilities ..... 2,400...
-
Salazar and child, Tahmores, are cash basis taxpayers. Salazar gave Tahmores a corporate bond with a face amount and fair market value of $10,000. On the date of the gift, September 30, 2023, the...
-
Whitestone Company produces two subassemblies, JR-14 and RM-13, used in manufacturing trucks. The company is currently using an absorption costing system that applies overhead based on direct-labor...
-
If wheel A rotates in direction of 2, then wheel B a- smooth and continuous in direction of 4 b- smooth & continuous in direction of 3 c- intermittently towards 4 d- intermittently towards 3 3 B A 2
-
Describe specific heat capacity and its use in calorimetry.
-
Describe a business practice that meets the legal level of social responsibility but does not meet the ethical level. Next, discuss two forms of moral disengagement that business leaders might...
-
Deciding on what legal form your business will take is an important one. As you saw in the Learning Activity, there are many reasons for choosing or not choosing a particular type of business entity....
-
Give a brief summary on each question. 1) What diffusion is or what it means? 2) How it relates to the Sodium Pump? 3) What is the affect a blood supply has on a tissue's ability to diffuse?
-
Depreciation Methods A delivery truck costing $22,000 is expected to have a $2,000 salvage value at the end of its useful life of four years or 100,000 miles. Assume that the truck was purchased on...
-
1.Which of the following is true regarding joint ventures? Multiple Choice Generally, joint ventures are taxed like corporations. If one of the members of a joint venture dies, the joint ventureis...
-
Nate prepares slides for his microscope. In 1 day he prepared 12 different slides. Which equation best represents y, the total number of slides Nate prepares in x days if he continues at this rate? A...
-
Fiber Systems manufactures an optical switch that it uses in its final product. The switch has the following manufacturing costs per unit: Another company has offered to sell Fiber Systems the switch...
-
On April 30, Fire & Ice Jewelers purchased inventory of $7,200 on account from Ruby Jewels, a jewelry importer. Terms were 3/15, net 45. On receiving the goods, Fire & Ice checked the order and found...
-
San Diego Paints is a national paint manufacturer and retailer. The company is segmented into five divisions: Paint stores (branded retail locations), Consumer (paint sold through stores like Sears...
-
Should morality, in and of itself, be considered a sufficient basis for defining particular conduct as criminal?
-
What are the chief distinctions between the civil and criminal law? Why do the criminal and civil law sometimes overlap?
-
What means of punishment for criminal offenses exist in your state? Is capital punishment available for persons convicted of first-degree murder? Which punishments, if any, do you think are most...
Study smarter with the SolutionInn App