Question
Assume that Sunland Construction Company has a non-cancellable contract to construct a $4,520,000 bridge at an estimated cost of $4,068,000. The contract is to start
Assume that Sunland Construction Company has a non-cancellable contract to construct a $4,520,000 bridge at an estimated cost of $4,068,000. The contract is to start in July 2023, and the bridge is to be completed in October 2025. The following data pertain to the construction period. Assume that progress billings are non-refundable.
| 2023 | 2024 | 2025 | ||||
| Costs to date (12/31) | $1,017,000 | $2,928,960 | $4,576,500 | |||
| Estimated costs to complete (12/31) | 3,051,000 | 1,647,540 | 0 | |||
| Progress billings during the year | 968,000 | 2,418,000 | 1,134,000 | |||
| Cash collected during the year | 817,000 | 1,897,000 | 1,806,000 |
The revised estimates for the bridge contract are as follows.
| 2023 Original Estimates | 2024 Revised Estimates | |||
| Contract price | $4,520,000 | $4,520,000 | ||
| Estimated total cost | 4,068,000 | 4,576,500* | ||
| Estimated gross profit | $452,000 | |||
| Estimated loss | $(56,500) |
*$2,928,960 + $1,647,540
(a1)
Under the percentage-of-completion method, calculate the total loss in 2024.
| Total loss in 2024 | $enter the total loss in dollars |
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Auditing Teams Dynamics And Efficiency
Authors: Mara Cameran, Angelo Ditillo, Angela Pettinicchio
1st Edition
1032097000, 9781032097008
