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Problem 18-10
On March 1, 2020, Pearl Construction Company contracted to
construct a factory building for Fabrik Manufacturing Inc. for a
total contract price of $8,360,000. The building was completed by
October 31, 2022. The annual contract costs incurred, estimated
costs to complete the contract, and accumulated billings to Fabrik
for 2020, 2021, and 2022 are given below:
|
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2020
|
|
2021
|
|
2022
|
| Contract costs incurred during the year |
|
$2,615,800 |
|
$2,633,000 |
|
$2,041,200 |
| Estimated costs to complete the contract at 12/31 |
|
3,764,200 |
|
2,041,200 |
|
–0– |
| Billings to Fabrik during the year |
|
3,230,000 |
|
3,500,000 |
|
1,630,000 |
(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 fields blank. Enter loss using
either a negative sign preceding the number e.g. -45 or parentheses
e.g. (45).)
|
2020
|
|
Profit / (Loss) Recognized in 2020Costs IncurredPercent
CompleteRevenue RecognizedEstimated Total CostsCosts to date
(12/31/20)Estimated Costs to Complete
|
|
$ |
|
|
Profit / (Loss) Recognized in 2020Percent CompleteEstimated
Total CostsRevenue RecognizedCosts to date (12/31/20)Estimated
Costs to CompleteCosts Incurred
|
|
|
|
|
Profit / (Loss) Recognized in
2020 Percent
Complete Revenue
Recognized Estimated Costs to
Complete Estimated Total
Costs Costs
Incurred Costs to date
(12/31/20)
|
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$ |
|
|
|
|
|
|
Profit / (Loss) Recognized in 2020Costs to date
(12/31/20)Estimated Total CostsCosts IncurredEstimated Costs to
CompletePercent CompleteRevenue Recognized
|
|
|
% |
|
|
|
|
|
Costs to date (12/31/20)Estimated Costs to CompleteEstimated
Total CostsPercent CompleteRevenue RecognizedCosts IncurredProfit /
(Loss) Recognized in 2020
|
|
$ |
|
|
Percent CompleteCosts to date (12/31/20)Costs IncurredProfit /
(Loss) Recognized in 2020Estimated Costs to CompleteRevenue
RecognizedEstimated Total Costs
|
|
|
|
|
Percent CompleteEstimated Costs to CompleteRevenue
RecognizedCosts IncurredProfit / (Loss) Recognized in 2020Costs to
date (12/31/20)Estimated Total Costs
|
|
$ |
|
|
2021
|
|
Estimated Total CostsPercent CompleteRevenue Recognized in
2021Profit / (Loss) Recognized in 2020Costs Incurred in 2021Costs
to date (12/31/21)Estimated Costs to Complete
|
|
$ |
|
|
Estimated Costs to CompleteEstimated Total CostsRevenue
Recognized in 2021Costs to date (12/31/21)Costs Incurred in
2021Profit / (Loss) Recognized in 2020Percent Complete
|
|
|
|
|
Estimated Costs to
Complete Costs to date
(12/31/21) Estimated Total
Costs Revenue Recognized in
2021 Costs Incurred in
2021 Percent
Complete Profit / (Loss) Recognized in
2020
|
|
$ |
|
|
|
|
|
|
Costs to date (12/31/21)Estimated Total CostsEstimated Costs to
CompletePercent CompleteRevenue Recognized in 2021Costs Incurred in
2021Profit / (Loss) Recognized in 2020
|
|
|
% |
|
|
|
|
|
Revenue Recognized in 2021Percent CompleteEstimated Total
CostsCosts Incurred in 2021Estimated Costs to CompleteProfit /
(Loss) Recognized in 2020Costs to date (12/31/21)
|
|
$ |
|
|
Profit / (Loss) Recognized in 2020Costs Incurred in
2021Estimated Costs to CompleteCosts to date (12/31/21)Estimated
Total CostsPercent CompleteRevenue Recognized in 2021
|
|
|
|
|
Costs Incurred in
2021 Estimated Total
Costs Revenue
Recognized Costs to date
(12/31/21) Percent
Complete Profit / (Loss) Recognized in
2021 Estimated Costs to
Complete
|
|
$ |
|
|
2022
|
|
Total Profit on ContractTotal Costs IncurredProfit Previously
RecognizedProfit / (Loss) Recognized in 2022Total Revenue
Recognized
|
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$ |
|
Total Revenue RecognizedTotal Costs IncurredTotal Profit on
ContractProfit Previously RecognizedProfit / (Loss) Recognized in
2022
|
|
|
|
Total Costs IncurredProfit Previously RecognizedTotal Revenue
RecognizedTotal Profit on ContractProfit / (Loss) Recognized in
2022
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|
AddLess
:
Total Profit on ContractTotal Revenue RecognizedProfit
Previously RecognizedProfit / (Loss) Recognized in 2022Total Costs
Incurred
|
|
|
|
Total Revenue RecognizedTotal Profit on ContractTotal Costs
IncurredProfit / (Loss) Recognized in 2022Profit Previously
Recognized
|
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$ |
(b) Using the completed-contract 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 fields blank. Enter loss using
either a negative sign preceding the number e.g. -45 or parentheses
e.g. (45).)
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