Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Percentage-of-Completion Analysis Smokey International Inc. recently acquired the Kurtz Builders Company. Kurtz has incomplete accounting records. On one particular project, only the information below is

image text in transcribed

Percentage-of-Completion Analysis Smokey International Inc. recently acquired the Kurtz Builders Company. Kurtz has incomplete accounting records. On one particular project, only the information below is available. 2014 2015 2016 Costs incurred during year Estimated cost to complete.. Recognized revenue Gross profit on contract. Contract price.. $200,000 450,000 220,000 ? 850,000 $250,000 ? 190,000 $ 0 ? ? 10,000 (10,000) Because the information is incomplete, you are asked the following questions assuming the percentage-of-completion method is used, an output measure is used to estimate the percentage completed, and revenue is recorded using the actual cost approach. 1. How much gross profit should be reported in 2014? 2. How much revenue should be reported in 2015? 3. How much revenue should be reported in 2016? 4. How much cost was incurred in 2016? 5. What are the total costs on the contract? 6. What would be the gross profit for 2015 if the cost-to-cost percentage-of-completion method were used rather than the output measure? (Hint: Ignore the revenue amount shown for 2014 and gross profit amount reported for 2015.) (Note: Round percentage to two decimal places.)

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

Contabilidad Para No Contadores

Authors: Wayne Label

2nd Edition

9587712986, 9789587712988

More Books

Students also viewed these Accounting questions

Question

2. Respect rules and constraints in your own behavior.

Answered: 1 week ago

Question

=+What kind of question would you ask to encourage their response?

Answered: 1 week ago

Question

=+Does it keep the visitor reading?

Answered: 1 week ago