Required: 2,250,000 4,240,000 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that the contract does not qualify for revenue recognition over time 2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years 3. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2024 and 2025 as either cost in excess of billings or billings in excess of costs Complete this question by entering your answers in the tabs below. Rea 1 and 2
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- On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?Curtiss Construction Company, Incorporated, entered into a fixed-price contract with Axelrod Associates on July 1, 2024, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,480,000. The building was completed on December 31, 2026. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: Percentage of completion Costs incurred to date Estimated costs to complete Billings to Axelrod, to date At 12-31-2024 At 12-31-2025 $367,000 3,303,000 728,000 $ 2,856,000 1,904,000 2,330,000 Ren 1 and 2 10% Dan 3 60% Answer is not complete. Complete this question by entering your answers in the tabs below. Required: 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three…Curtiss Construction Company, Incorporated, entered into a fixed-price contract with Axelrod Associates on July 1, 2024, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,720,000. The building was completed on December 31, 2026. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: At 12-31-2024 At 12-31-2025 At 12-31-2026 Percentage of completion 10% 60% 100% Costs incurred to date $ 371,000 $ 3,024,000 $ 5,102,000 Estimated costs to complete 3,339,000 2,016,000 0 Billings to Axelrod, to date 732,000 2,410,000 4,720,000 Required: Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that the contract does not…
- Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,000,000. The building was completed on December 31, 2023. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: Percentage of completion Costs incurred to date Estimated costs to complete Billings to Axelrod, to date Req 1 and 2 Complete this question by entering your answers in the tabs below. Req 3 At 12-31-2021 At 12-31-2022 10% $ 350,000 3,150,000 720,000 $2,500,000 1,700,000 2,170,000 Year 2021 2022 2023 Total project profit (loss) Required: 1. Compute gross profit or loss to be recognized as a result of this contract for each of…Grein's Construction Company, entered into a fixed-price contract with Alexa Co. on July 1, 2024, to construct a four-story office building. At that time, Grein's estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,420,000. The building was completed on December 31, 2026. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: Costs incurred to date Estimated costs to complete Billings to Axelrod, to date At 12-31-2024 $366,000 3,294,000 727,000 Year 2024 2025 2026 At 12-31-2025 $ 2,814,000 1,876,000 2,310,000 Gross Profit (Loss) Recognized At 12-31-2026 $4,747,000 0 Assuming Grein's recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years. If there is a loss, put the number in…Curtiss Construction Company, Inc. entered into a fixed-price contract with Stewart Associates on July 1, 2019, to construct a four-story office building. At that time, Curtiss estimated it would take between two and three years to complete the project. The total contract price for construction of the building is $5,000,000. The building was completed on December 31, 2021. Information related to the construction is as follows: At 12/31/19 At 12/31/20 Costs incurred to date Estimated costs to complete Billings to Stewart Required: 1. Prepare entries to record construction costs and billings for each year $350,000 3,150,000 700,000 $2,500,000 1,700,000 At 12/31/21 2,200,000 $4,250,000 0 2,100,000
- On July 1, 2025, Wildhorse Construction Company Inc. contracted to build an office building for Indigo Corp. for a total contract price of $1,880,000. On July 1, Wildhorse estimated that it would take between 2 and 3 years to complete the building. On December 31, 2027, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Indigo for 2025, 2026, and 2027. At 12/31/25 At 12/31/26 At 12/31/27 Contract costs incurred to date $286,900 $1,122,900 $2,066,700 Estimated costs to complete the contract 1,223,100 847,100 -0- Billings to Indigo 300,000 1,100,000 1,830,000 (a1) (a2) Using the percentage-of-completion method, prepare a schedule to compute the profit or loss to be recognized as a result of this contract for the year ended December 31, 2026. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any fields blank.) × Your answer is incorrect. > 2026…On February 1, 2020, Mar Contractors agreed to construct a building at a contract price of $15,400,000. Mar initially estimated total construction costs would be $12,000,000 and the project would be finished in 2023. Information relating to the costs and billings for this contract during 2020-2022 is as follows: Total costs incurred during the year Estimated costs to complete Customer billings to date Collections to date 2020 4,500,000 7,500,000 6,600,000 6,000,000 2021 5,300,000 4,200,000 12,000,000 10,500,000 2022 4,000,000 1,800,000 13,800,000 13,500,000 a. Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract and all the necessary journal entries for the years ended December 31, 2020, 2021, and 2022. b. Using the cost-recovery method, prepare schedules to compute the profit or loss to be recognized as a result of this contract all the necessary journal entries to record the costs,…On July 1, 2025, Sunland Construction Company Inc. contracted to build an office building for Novak Corp. for a total contract price of $1,920,000. On July 1, Sunland estimated that it would take between 2 and 3 years to complete the building. On December 31, 2027, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Novak for 2025, 2026, and 2027. At 12/31/25 At 12/31/26 At 12/31/27 Contract costs incurred to date Estimated costs to complete the contract Billings to Novak $273,600 1,246,400 $1,171,600 $2,127,600 848,400 -0- 300,000 1,090,000 1,870,000 (a1) Using the percentage-of-completion method, prepare a schedule to compute the profit or loss to be recognized as a result of this contract for the year ended December 31, 2025. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any fields blank.) Costs to Date (12/31/25) Estimated Costs to Complete…
- On July 1, 2020, Oriole Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,880,000. On July 1, Oriole estimated that it would take between 2 and 3 years to complete the building. On December 31, 2022, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2020, 2021, and 2022. At12/31/20 At12/31/21 At12/31/22 Contract costs incurred to date $288,800 $1,227,600 $2,078,500 Estimated costs to complete the contract 1,231,200 752,400 –0– Billings to Gumbel 290,000 1,090,000 1,820,000 (a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2020, 2021, and 2022. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any field blank.…On February 1, 2023, Magicfort Contractors agreed to construct a building at a contract price of $5,840,000. Magicfort estimated total construction costs would be $4,032,000 and the project would be finished in 2025. Information relating to the costs and billings for this contract is as follows: 2023 2024 2025 Total costs incurred to date Estimated costs to complete $1,512,000 2,520,000 $2,664,000 $4,620,000 1,776,000 -0- Customer billings to date 2,240,000 4,032,000 5,640,000 Collections to date 2,040,000 3,540,000 5,540,000 Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and cost-recovery accounting, show the gross profit that should be reported for 2023, 2024, and 2025. Percentage-of-Completion Gross Profit 2023 2023 Cost-Recovery Gross Profit 2024 $ 2025 $ SA 2024 2025 $On February 1, 2023, Sandhill Contractors agreed to construct a building at a contract price of $3,460,000. The total estimated construction costs would be $1,890,000 and the project would be finished in 2025. Information relating to the costs and billings for this contract is as follows: Total costs incurred to date Estimated costs to complete Customer billings to date Collections to date 2023 Gross profit/ (loss) 689,850 1,200,150 1,100,000 1,000,000 2023 2024 573050 $1,162,000 $ 2,365,000 913,000 1,890,000 1,750,000 2025 Calculate the gross profit / (loss) that should be recognized for 2023, 2024, and 2025 using the percentage completion method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round percentage complete to 1 decimal place, e.g. 15.2% and final answers to O decimal places, e.g. 5,125.) 2024 -0- 3,460,000 2,950,000 -107450 $ LA 2025 40450