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In February 2023, Sheridan Construction signed a contract and commenced construction on a parking garage. The total contract price was $88.30 million and was
In February 2023, Sheridan Construction signed a contract and commenced construction on a parking garage. The total contract price was $88.30 million and was expected to be completed in July 2027 at a total estimated cost of $81.0 million. Payment by the customer was to be made in several stages, based on significant events and dates throughout the construction timeline. The customer was to have control over the parking garage and was able to make major changes to the project during the construction process. Sheridan's year-end was September 30. By the end of September, 2023, Sheridan had incurred $20,250,000 in costs and had invoiced $7,600,000 in progress billings. $7,100,000 of the progress billings had been collected. By September 30, 2024, Sheridan had incurred $43,452,000 in total costs and had invoiced $45,007,000 in progress billings, including the progress billings in 2023. Of the total billings, $30,900,000 in total had been collected. Also, Sheridan reviewed its cost estimates on the project, and now believed the parking garage would cost $72.4 million in total to complete. Prepare all journal entries required for the year ended September 30, 2023. Use Materials, Cash, Payables for costs incurred to date. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) No. Account Titles and Explanation Debit Credit 1. 2. (To record the 2023 cost of construction) 3. (To record the 2023 progress billings) (To record the 2023 cash collections) 4. 5. (To record the 2023 revenue) (To record the construction expenses) In 2023, Carla Vista Contractors began construction on an office building. The building was expected to cost $47,710,000 in total and was expected to be completed in early 2025. The customer was to pay Carla Vista $50,580,000 for the building. Carla Vista was able to use percentage-of-completion accounting for the project, and at the end of 2023 had accumulated $11,927,500 in cost. Carla Vista estimated that the costs to complete the construction were in line with the original expected total costs. During 2024, there was a lumber shortage, a strike by construction workers, and various other incidents that dramatically raised costs in the construction industry. As a result, at the end of 2024, Carla Vista estimated that the office building would cost an additional $4,130,000 more than originally estimated. To the end of 2024, Carla Vista had spent $39,398,400 on constructing the office building. (a1) Calculate the revenue to be recognized by Carla Vista for the 2024 fiscal year. Revenue to be recognized $
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