Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On July 1, 2020, Waterway Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,910,000. On

On July 1, 2020, Waterway Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,910,000. On July 1, Waterway 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 $302,000 $1,105,500 $2,115,200
Estimated costs to complete the contract 1,208,000 904,500 0
Billings to Gumbel 300,000 1,080,000 1,860,000

image text in transcribed

image text in transcribed

image text in transcribed

2020 Il Costs to date (12/31/20) 302000 Estimated Costs to Complete 1208000 Estimated Total Costs 1510000 | Percent Complete 20% Revenue Recognized 382000 Costs Incurred (302000) 80000 Gross Profit / (Loss) Recognized in 2020 - 2021 Costs to date (12/31/21) 1105500 | Estimated Costs to Complete 904500 I Estimated Total Costs 2010000 Contract Price 1910000 Total Profit/Loss 100000 | Total Profit/Loss 100000 Gross Profit Recognized in 2020 80000 Profit / (Loss) Recognized in 2021 20000 2022 Costs to date (12/31/22) 2115200 Estimated Costs to Complete 0 2115200 Contract Price 1910000 Total Profit/Loss 205200 Total Profit/Loss 205200 Profit / (Loss) Recognized in 2021 XX 20000 Gross Profit / (Loss) Recognized in 2020 80000 100000 Profit / (Loss) Recognized in 2022 ) 105200 (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 o, 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).) 2021 Contract Price 1910000 Estimated Total Costs 2010000 Profit/ (Loss) Recognized in 2021 | (100000) (b) Using the completed-contract method, prepare schedules to compute the profit or loss ti 2022. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any fields b prececeding the number e.g. -45 or parenthesis e.g. (45).) 2021 | Contract Price 1910000 Estimated Total Costs 2010000 I Profit / (Loss) Recognized in 2021 A (100000) 2022 Il Contract Price 1910000 || Costs Incurred 2115200 Total Profit / (Loss) on Contract Al (205200) | Profit / (Loss) Recognized in 2021A) (100000) Profit / (Loss) Recognized in 2022 Al (105200)|

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

Accounting For Deferred Income Taxes

Authors: Bobby Carmichael

2nd Edition

1119724562, 9781119724568

More Books

Students also viewed these Accounting questions