The Urban Construction Company commenced doing business in January 2008.Construction activities for the year 2008 are summarized in the following table.

The company is your client. The president has asked you to compute the amounts of revenue for the year ended December 31, 2008, that would be reported under the completed-contract method and the percentage-of-completion method of accounting for long-term contracts.
The following information is available:
(a) Each contract is with a different customer.
(b) Any work remaining to be done on the contracts is expected to be completed in 2009.
(c) The company's accounts have been maintained on the completed-contract method.

Instructions:
1. Prepare a schedule computing the amount of revenue, cost, and gross profit (loss) by project for the year ended December 31, 2008, to be reported under
(a) The percentage-of- completion method and
(b) The completed-contract method. (Round to two decimal places on percentages.)
2. Prepare a schedule under the completed-contract method, computing the amount that would appear on the company's balance sheet at December 31, 2008, for
(a) Costs in excess of billings and
(b) Billings in excess of costs.
3. Prepare a schedule under the percentage-of-completion method showing the computation of the amount that would appear on the company's balance sheet at December 31, 2008, for
(a) Costs and estimated earnings in excess of billings and
(b) Billings in excess of costs and estimatedearnings.

Transcribed Image Text:

Contract Estimated Additional Total Contract Price Expenditures to Dec. 31, 2008 Costs to Complete Contracts Cash Collections to Dec. 31, 2008 Billings to Dec. 31, 2008 Project $ 12.500 255.000 $155,000 249,000 350,000 A. .310,000 415.000 350,000 300.000 $187.500 195.000 310,000 $155.000 210.000 300,000 D. 83.500 $451 C00 16.500 4.000 $1,375,000 $709,000 $655.000 $758,000