On March 1, 2014, Chance Company entered into a contract to build an apartment b
ID: 2424426 • Letter: O
Question
On March 1, 2014, Chance Company entered into a contract to build an apartment building. It is estimated that the building will cost $2,092,000 and will take 3 years to complete. The contract price was $3,368,000. The following information pertains to the construction period. 2014 2015 2016 Costs to date $690,360 $1,480,500 $2,124,000 Estimated costs to complete 1,401,640 634,500 –0– Progress billings to date 850,000 2,065,000 3,368,000 Cash collected to date 810,000 1,916,000 3,263,000 Incorrect answer. Your answer is incorrect. Try again. Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. Gross profit recognized in 2014 $Entry field with incorrect answer 854920 Gross profit recognized in 2015 $Entry field with incorrect answer Gross profit recognized in 2016 $Entry field with incorrect answer SHOW LIST OF ACCOUNTS LINK TO TEXT Incorrect answer. Your answer is incorrect. Try again. Prepare all necessary journal entries for 2016. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For costs incurred use account Materials, Cash, Payables.) Account Titles and Explanation Debit Credit Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer (To record cost of of construction.) Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer (To record progress billings.) Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer (To record collections.) Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer (To recognize revenue.) Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer (To record completion of the contract.) SHOW LIST OF ACCOUNTS LINK TO TEXT Incorrect answer. Your answer is incorrect. Try again. Prepare a partial balance sheet for December 31, 2015, showing the balances in the receivables and inventory accounts. (List Current Assets in order of liquidity.) CHANCE COMPANY Balance Sheet (Partial) December 31, 2015 Entry field with incorrect answer: Entry field with incorrect answer $Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer $Entry field with incorrect answer Entry field with incorrect answer: Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer
Explanation / Answer
2014 2015 2016 Total $ Cost to Date A 690360 1480500 2124000 Estimated Cost to complete B 1401640 634500 0 2036140 Progress Billing till date C 850000 2065000 3368000 Cash Collected till date D 810000 1916000 3263000 Contract Price E 3368000 3368000 3368000 Total Estimated Cost f 2092000 Percentage of work completed A/F G 33 71 100 Revenue Recognized till date G*E/100 H 1111440 2383520 3368000 Ans 1Gross profit till date H-A 421080 903020 1244000 Revenue Recognized Percentage of Work Completed in the Period/Total Contract Value Percentage of work completed Expenditures Incurred from Inception to Date/Total estimated Cost for the contract Ans 2 & 3 Dr Cr 1. To record the cost incurred: Work-in-progress 2124000-1480500 643500 Accounts payable and others 643500 2. To record the amount billed: Accounts receivable=3368000-2065000 1303000 Billings 1303000 3. To record the collections: Cash 3263000-1916000 1347000 Accounts receivable 1347000 4. To record the revenue: Billings 3368000 Contruction Contracts Revenue 3368000 5. To expense out the work-in-progress: Cost of construction 2124000 Work-in-progress 2124000 Balance Sheet Ans 4 Receivable (3368000-3263000) 105000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.