Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In 2017. Ithaca Constniction Company entered uto a cantract to construct a building for $20.000. The conastruction was complcted in 2019. Information related to

   

2. Determine the amount of gross profit or loss to be recognized in each of the three years (i.e., 2017, 2018, and 2019) unde 

In 2017. Ithaca Constniction Company entered uto a cantract to construct a building for $20.000. The conastruction was complcted in 2019. Information related to the contract s as lollovs: 2017 2018 2019 Costs incurred during the year Estimated costs to complete as of year-end $4,800 $7.200 $4.400 11.200 4,000 Billings during the year 4,000 8,000 .000 Cash collections during the year 3,600 7.200 9.200 Use the information above to answer the following questions. (9 marks) 1. Determine the amount of gross profit or loss to be recognized in each of the three years (i.e., 2017, 2018. and 2019) using the percentage-of-completion method. 2. Determine the amount of gross profit or loss to be recognized in each of the three years (i.e., 2017, 2018, and 2019) under US GAAP, assuming that using the percentage-of-completion method is not appropriate. 3. Determine the amount of gross profit or loss to be recognized in each of the three years (i.e., 2017, 2018, and 2019) under IFRS, assuming that using the percentage-of- completion method is not appropriate.

Step by Step Solution

3.41 Rating (157 Votes )

There are 3 Steps involved in it

Step: 1

Determination of Gross profitloss under percentage completion method Total contract revenue 20000 Particulars Cumulative Cost Estimated additional cost Total estimated cost of completion Cost incurred ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: Loren A. Nikolai, John D. Bazley, Jefferson P. Jones

11th edition

978-0538467087, 9781111781262, 538467088, 1111781265, 978-0324659139

More Books

Students also viewed these Accounting questions