Hydo-Pro Dam Builders develops large scale hydro-electric dam projects. The company has been the main contractor on dam projects on every continent and on some of the world's greatest rivers. Hydro-Pro has just begun a project to build a series of dams on the Amazon river. The first phase of the project is $900 million and is expected to take 3 years to complete. Here are some of the relevant facts (All dollar numbers below are in millions): Contract price: $900 2018 2019 2020 $ 72 $ 593 $ 255 $ 728 S 285 SO Construction costs incurred in the current year: Estimated costs to complete the contract at end of the year. Billings on the contract in the current vear. Dollars collected on billings in the current year S 150 S 600 S 150 S 100 S 630 $ 170 Balance Sheet December 31, 2017 Cash Common Stock Retained Earnings $ 300 $ 125 175 Requirement: Use the percentage-of-completion contract method to do the following for the year 2018 and 2019 of the contract: 1) complete the necessary calculations using the spreadsheet provided in the next page, 2) prepare all necessary journal entries, 3) show the relevant Balance Sheet presentation for the year 2018. 2018 2019 Contract Price 900 900 Costs in Current Year 72 593 Costs in Prior Year(s) Cumulative Costs to Date Estimated Costs to Complete 728 285 Total Estimated Costs Total Contract Price I 900 900 Completion Percentage Cumulative Revenue Recognized to date Revenue Recognized in Prior Year(s) Revenue to Recognize Current Year Total Estimated Costs Total Contract Price 900 900 Completion Percentage Cumulative Revenue Recognized to date Revenue Recognized in Prior Year(s) Revenue to Recognize Current Year Estimated Gross Profit Completion Percentage Cumulative Gross profit Recognized to date Gross Profit Recognized in Prior Year(s) Gross Profit to Recognize Current Year 1 Billings on Contract in Current Year 150 600 S Collected in Current Year 100 630 Hydo-Pro Dam Builders develops large scale hydro-electric dam projects. The company has been the main contractor on dam projects on every continent and on some of the world's greatest rivers. Hydro-Pro has just begun a project to build a series of dams on the Amazon river. The first phase of the project is $900 million and is expected to take 3 years to complete. Here are some of the relevant facts (All dollar numbers below are in millions): Contract price: $900 2018 2019 2020 $ 72 $ 593 $ 255 $ 728 S 285 SO Construction costs incurred in the current year: Estimated costs to complete the contract at end of the year. Billings on the contract in the current vear. Dollars collected on billings in the current year S 150 S 600 S 150 S 100 S 630 $ 170 Balance Sheet December 31, 2017 Cash Common Stock Retained Earnings $ 300 $ 125 175 Requirement: Use the percentage-of-completion contract method to do the following for the year 2018 and 2019 of the contract: 1) complete the necessary calculations using the spreadsheet provided in the next page, 2) prepare all necessary journal entries, 3) show the relevant Balance Sheet presentation for the year 2018. 2018 2019 Contract Price 900 900 Costs in Current Year 72 593 Costs in Prior Year(s) Cumulative Costs to Date Estimated Costs to Complete 728 285 Total Estimated Costs Total Contract Price I 900 900 Completion Percentage Cumulative Revenue Recognized to date Revenue Recognized in Prior Year(s) Revenue to Recognize Current Year Total Estimated Costs Total Contract Price 900 900 Completion Percentage Cumulative Revenue Recognized to date Revenue Recognized in Prior Year(s) Revenue to Recognize Current Year Estimated Gross Profit Completion Percentage Cumulative Gross profit Recognized to date Gross Profit Recognized in Prior Year(s) Gross Profit to Recognize Current Year 1 Billings on Contract in Current Year 150 600 S Collected in Current Year 100 630
