Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In 2018, Long Construction Corporation began construction work under a three-year contract. The contract price is $2,200,000. Long recognizes revenue over time according to percentage

image text in transcribed

In 2018, Long Construction Corporation began construction work under a three-year contract. The contract price is $2,200,000. Long recognizes revenue over time according to percentage of completion for financial reporting purposes. The financial statement presentation relating to this contract at December 31, 2018, is as follows: $36,000 Balance Sheet Accounts receivable (from construction progress billings) Construction in progress Less: Billings on construction contract Cost and profit of uncompleted contracts in excess of billings $ 160,000 (152,000) 8,000 Income Statement Income (before tax) on the contract recognized in 2018 $ 26,000 Required: 1. What was the cost of construction actually incurred in 2018? 2. How much cash was collected in 2018 on this contract? 3. What was the estimated cost to complete as of the end of 2018? 4. What was the estimated percentage of completion used to calculate revenue in 2018? 1. Actual costs incurred in 2018 2. Cash collections in 2018 3. Estimated cost to complete 4. Estimated percentage

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

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

Connect For Financial Accounting Fundamentals

Authors: Author

8th Edition

126411169X, 9781264111695

More Books

Students also viewed these Accounting questions

Question

Identify examples of loaded language and ambiguous language.

Answered: 1 week ago