Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Crib Construction is constructing an office building under contract for Blanket Company and uses the percentage-of-completion method. The contract calls for progress billings and payments

Crib Construction is constructing an office building under contract for Blanket Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1,550,000 each quarter. The total contract price is $18,600,000 and Crib estimates total costs of $17,750,000. Crib estimates that the building will take 3 years to complete, and commences construction on January 2, 2018. At December 31, 2019, Crib Construction estimates that it is 75% complete with the building (it was 30% complete in 2018); however, the estimate of total costs to be incurred has risen to $18,000,000 due to unanticipated price increases. What is the total amount of Construction Expenses that Crib will recognize for the year ended December 31, 2019?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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_2

Step: 3

blur-text-image_3

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

Managerial Accounting Creating Value in a Dynamic Business Environment

Authors: Ronald W. Hilton

9th edition

78110912, 978-0078110917

More Books

Students also viewed these Accounting questions

Question

Differentiate health psychology from behavioral medicine.

Answered: 1 week ago