Question

Ivanhoe Construction Company uses the percentage-of-completion method of accounting. In 2021, Ivanhoe began work on a...

Ivanhoe Construction Company uses the percentage-of-completion method of accounting. In 2021, Ivanhoe began work on a contract it had received which provided for a contract price of $39500000. Other details follow:

2021
Costs incurred during the year $18800000
Estimated costs to complete as of December 31 12800000
Billings during the year 17500000
Collections during the year 9700000

What should be the gross profit recognized in 2021?

$7900000
$4700000
$20700000
$1566667
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Calculation of gross profit till date

Total estimated cost = cost incurreed during the year + estimated cost to complete

Total estimated cost = 18800,000 + 12800,000

Total estimated cost =$ 31600,000

% complete = cost incurreed during the year/ Total estimated cost *100

% complete = 18800,000/31600,000 * 100 = 59.4936 %

Revenue to date = Contract price * % complete

Revenue to date = 39500,000 * 59.4936%

Revenue to date = $ 23500,000 approx

Less : cost till date = $18800,000

Gross profit =$ 4700,000

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Wildhorse Construction Company uses the percentage-of-completion method of accounting. In 2020, Wildhorse began work under contract...
Wildhorse Construction Company uses the percentage-of-completion method of accounting. In 2020, Wildhorse began work under contract #E2-D2, which provided for a contract price of $2,165,000. Other details follow: 2020 2021 Costs incurred during the year $590,520 $1,409,000 Estimated costs to complete, as of December 31 1,005,480 –0– Billings during the year 428,000 2,165,000 Collections during the year 349,000 1,509,000 What portion of the total contract price would be recognized as revenue in 2020? In 2021? Revenue recognized in 2020 $...
Novak Construction Company uses the percentage-of-completion method of accounting. In 2020, Novak began work under contract...
Novak Construction Company uses the percentage-of-completion method of accounting. In 2020, Novak began work under contract #E2-D2, which provided for a contract price of $2,170,000. Other details follow: 2020 2021 Costs incurred during the year $615,810 $1,422,000 Estimated costs to complete, as of December 31 963,190 –0– Billings during the year 426,000 2,170,000 Collections during the year 343,000 1,520,000 (a) New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect. What...
Nash Construction Company uses the percentage-of-completion method of accounting. In 2017, Nash began work under contract...
Nash Construction Company uses the percentage-of-completion method of accounting. In 2017, Nash began work under contract #E2-D2, which provided for a contract price of $2,234,000. Other details follow: 2017 2018 Costs incurred during the year $615,980 $1,420,000 Estimated costs to complete, as of December 31 1,005,020 –0– Billings to date 413,000 2,234,000 Collections during the year 351,000 1,530,000 (a) What portion of the total contract price would be recognized as revenue in 2017? In 2018? Revenue recognized in 2017 $...
Long Construction Company uses the percentage-of-completion method of accounting for long-term construction contracts. During 2021, Long...
Long Construction Company uses the percentage-of-completion method of accounting for long-term construction contracts. During 2021, Long began work on a $400 million fixed-fee construction contract, which was completed in 2024. Cost incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): Cost Incurred Estimated Costs to Complete as of December 31 2021 $60 $240 2022 $84 $176 For the year 2022, Long should have recognized gross profit on this contract...
Windham Construction Company uses the percentage of completion method of accounting. In 2018 Windham started work...
Windham Construction Company uses the percentage of completion method of accounting. In 2018 Windham started work on a two-year contract with a total price of $15,000,000. Data for 2018 and 2019 are presented below: (Follow GAAP)                                                                  2018                            2019                       Costs incurred to date             $7,200,000                  $12,050,000             Estimated costs to complete   4,800,000                         - 0 -             Billings during the year          6,000,000                      9,000,000             Collections during the year     4,200,000                      8,900,000 (a)       How much...
Exercise 6-29 (Part Level Submission) Sandhill Construction Company uses the percentage-of-completion method of accounting. In 2017,...
Exercise 6-29 (Part Level Submission) Sandhill Construction Company uses the percentage-of-completion method of accounting. In 2017, Sandhill began work under a non-cancellable contract #E2-D2, which provided for a contract price of $2,024,000. Other details follow: 2017 2018 Costs incurred during the year $588,800 $1,311,000 Estimated costs to complete, as at December 31 883,200 0 Billings during the year (non-refundable) 386,400 1,545,600 Collections during the year 322,000 1,380,000 Collapse question part (a) How much revenue should be recognized in 2017 and...
Redwood Construction Company uses the percentage-of-completion method of accounting for long-term construction contracts. During 2021, Redwood...
Redwood Construction Company uses the percentage-of-completion method of accounting for long-term construction contracts. During 2021, Redwood began work on a $4,300,000 fixed-fee construction contract, which was completed in 2024. Cost Incurred Estimated Additional Cost to Complete 2021 $800,000 $3,200,000 2022 $1,000,000 $2,200,000 2023 $936,000 $1,064,000 For the year 2023, Redwood should have recognized gross profit on this contract of: A)500,000 B)300,000 C)225,00 D)135,000
Gomez, Inc. began work in 2010 on contract #3814, which provided for a contract price of...
Gomez, Inc. began work in 2010 on contract #3814, which provided for a contract price of $7,200,000. Other details follow: 2010 2011 Costs incurred during the year $1,200,000 $3,675,000 Estimated costs to complete, as of December 31 3,600,000 0 Billings during the year 1,350,000 5,400,000 Collections during the year 900,000 5,850,000 14. Assume that Gomez uses the percentage-of-completion method of accounting. The portion of the total gross profit to be recognized as income in 2010 is a. $450,000. b. $600,000....
A company began work in 2020 on a contract for $6,800. Other data are as follows:...
A company began work in 2020 on a contract for $6,800. Other data are as follows:                                                        2020                         2021 2020 2021 costs incurred to date $3,100 $5,600 Estimated Costs to complete 2,000 ----------- Billings to date 3,400 6,800 Collections to date 2,000 4,800 If the company uses the percentage-of-completion method, the gross profit to be recognized in 2021 is                          .
Kiner, Inc. began work in 2018 on a contract for €21,000,000. Other data are as follows:...
Kiner, Inc. began work in 2018 on a contract for €21,000,000. Other data are as follows: 2018     2019 Costs incurred to date €9,000,000 €14,000,000 Estimated costs to complete 6,000,000 — Billings to date 7,000,000 21,000,000 Collections to date 5,000,000 18,000,000 8. If Kiner uses the percentage-of-completion method, the gross profit to be recognized in 2018 is A. €3,600,000. B. €4,000,000. C. €5,400,000. D. €6,000,000. 9. If Kiner uses the cost-recovery method, the gross profit to be recognized in 2019 is...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT