Question
On July 1, 2020, Marigold Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,890,000. On
On July 1, 2020, Marigold Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,890,000. On July 1, Marigold estimated that it would take between 2 and 3 years to complete the building. On December 31, 2022, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2020, 2021, and 2022.
At 12/31/20 | At 12/31/21 | At 12/31/22 | ||||
Contract costs incurred to date | $286,900 | $1,154,200 | $2,088,600 | |||
Estimated costs to complete the contract | 1,223,100 | 835,800 | 0 | |||
Billings to Gumbel | 300,000 | 1,090,000 | 1,840,000 |
(a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2020, 2021, and 2022. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any field blank. If an amount should be deducted then enter the amount using either a negative sign prececeding the number e.g. -45 or parenthesis e.g. (45).)
2020 | |||
Percent CompleteEstimated Costs to CompleteProfit / (Loss) Recognized in 2020Revenue RecognizedCosts to date (12/31/20)Estimated Total Costs | $ | ||
Estimated Costs to CompleteCosts to date (12/31/20)Profit / (Loss) Recognized in 2020Percent CompleteEstimated Total CostsRevenue Recognized | |||
Percent CompleteProfit / (Loss) Recognized in 2020Costs to date (12/31/20)Estimated Total CostsEstimated Costs to CompleteRevenue Recognized | $ | ||
Costs to date (12/31/20)Profit / (Loss) Recognized in 2020Revenue RecognizedPercent CompleteEstimated Costs to CompleteEstimated Total Costs | % | ||
Profit / (Loss) Recognized in 2020Revenue RecognizedEstimated Costs to CompleteEstimated Total CostsCosts IncurredPercent Complete | $ | ||
Revenue RecognizedEstimated Costs to CompletePercent CompleteEstimated Total CostsCosts IncurredProfit / (Loss) Recognized in 2020 | |||
Revenue RecognizedCosts IncurredEstimated Total CostsProfit / (Loss) Recognized in 2020Percent CompleteEstimated Costs to Complete | $ |
(b) Using the completed-contract method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2020, 2021, and 2022. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any fields blank. If an amount should be deducted then enter the amount using either a negative sign prececeding the number e.g. -45 or parenthesis e.g. (45).)
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