Sunland Construction Company began operations on January 1, 2020. During the year, Sunland entered into a non-cancellable contract with Culver Corp. to construct a manufacturing facility. At that time, Sunland estimated that it would take five years to complete the facility at a total cost of $4,533,000. The total contract price for construction of the facility is $6,019,000. During the year, Sunland incurred $1,143,030 in construction costs related to the project. The estimated cost to complete the contract is $4,299,970. Culver Corp. was billed and paid 26% of the contract price. The billings are non-refundable.

Prepare schedules to calculate the amount of gross profit to be recognized for the year ended December 31, 2020, and the amount to be shown as contract assets or liabilities at December 31, 2020, under the completed-contract method. (Do not leave any answer field blank. Enter 0 for amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Gross profit to be recognized for the year ended December 31, 2020

Sunland Construction Company Computation of Contract Liability choose the accounting period Year Ended December 31, 2020Month Ended December 31, 2020Quarter Ended December 31, 2020
select an item Gross profitPercentage of completionContract priceEstimated costs to completeContract liabilityEstimated profitRevenue recognizedConstruction costs incurred during the yearPartial billings on contract		$enter a dollar amount
select an item Percentage of completionPartial billings on contractContract liabilityRevenue recognizedEstimated costs to completeEstimated profitContract priceConstruction costs incurred during the yearGross profit		enter a dollar amount
select a closing name for this schedule Construction costs incurred during the yearContract liabilityContract priceEstimated costs to completeEstimated profitGross profitPartial billings on contractPercentage of completionRevenue recognized		$enter a total amount

eTextbook and Media

Assistance Used

• eTextbook

Prepare schedules to calculate the amount of gross profit to be recognized for the year ended December 31, 2020, and the amount to be shown as contract assets or liabilities at December 31, 2020, under the percentage-of-completion method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Sunland Construction Company Computation of Gross Profit and Contract Liability choose the accounting period Month Ended December 31, 2020Year Ended December 31, 2020Quarter Ended December 31, 2020
select an item Contract priceGross profitEstimated costs to completeCosts to datePartial billings on contractPercentage of completionEstimated profitRevenue recognizedContract liability				$enter a dollar amount
select an item Gross profitPartial billings on contractContract pricePercentage of completionEstimated profitCosts to dateEstimated costs to completeRevenue recognizedContract liability		$enter a dollar amount
select an item Partial billings on contractEstimated profitGross profitContract liabilityRevenue recognizedPercentage of completionContract priceEstimated costs to completeCosts to date		enter a dollar amount
				enter a subtotal of the two previous amounts
select a summarizing line for the first part Contract priceContract liabilityPartial billings on contractGross profitRevenue recognizedEstimated costs to completeCosts to dateEstimated profitPercentage of completion				enter a total amount for the first part
select an item Percentage of completionCosts to dateEstimated costs to completeGross profitRevenue recognizedContract pricePartial billings on contractEstimated profitContract liability				enter percentages	%
select a closing name for section one Revenue recognizedGross profitPercentage of completionContract priceCosts to dateContract liabilityPartial billings on contractEstimated costs to completeEstimated profit				enter a total amount for section one
select an item Contract priceContract liabilityPercentage of completionEstimated profitPartial billings on contractCosts to dateGross profitRevenue recognizedEstimated costs to complete				$enter a dollar amount
select an item Costs to dateRevenue recognizedEstimated profitGross profitContract liabilityEstimated costs to completePartial billings on contractContract pricePercentage of completion				enter a dollar amount
select a closing name for section two Contract liabilityContract priceCosts to dateRevenue recognizedEstimated costs to completeEstimated profitPercentage of completionGross profitPartial billings on contract				$enter a total amount for section two