Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

King Corporation started the construction of a building during 2017 at a contract price of $5,000,000. The contract to build was non-cancellable and they managed

King Corporation started the construction of a building during 2017 at a contract price of $5,000,000. The contract to build was non-cancellable and they managed to complete the project in 2019 as anticipated. Billings are nonrefundable and under the terms of the project, King sends billings to the vendor as revenues are earned. The following additional information is available:

2017 2018 2019

Costs to-date $ 800,000 $2,500,000 $4,800,000

Estimated costs to complete $2,400,000 $2,500,000 $0

Required:

a. Calculate the amount of revenue to be recognized each year using the percentage of completion method. (2017, 2018 & 2019)

b. Calculate the amount of gross profit/loss that should be recognized (2017, 2018 & 2019) each year using the percentage-of-completion method

c. What is the amount of gross profit/loss that should be recognized each year under the completed-contract method?

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

Students also viewed these Accounting questions

Question

Compose the six common types of social business messages.

Answered: 1 week ago

Question

Describe positive and neutral messages.

Answered: 1 week ago