Ch+5+Pr+6 2 - $50,000 2007: $(200,000) - 50,000 =...

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Problem 5-6 Requirement 1 2006 2007 2008 Contract price $4,000,000 $4,000,000 $4,000,000 Actual costs to date 350,000 2,500,000 4,250,000 Estimated costs to complete 3,150,000 1,700,000 - 0 - Total estimated costs 3,500,000 4,200,000 4,250,000 Estimated gross profit (loss) (actual in 2008) $ 500,000 $ (200,000 ) $ (250,000 ) Year Gross profit (loss) recognized 2006 - 0 - 2007 $(200,000) 2008 (50,000 ) Total project loss $(250,000 ) Requirement 2 Gross profit (loss) recognition: 2006: 10% x $500,000 =
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Unformatted text preview: $50,000 2007: $(200,000) - 50,000 = $(250,000) 2008: $(250,000) - (200,000) = $(50,000) Requirement 3 Balance Sheet 2006 2007 Current assets: Costs less loss ($2,300,000*) in excess of billings ($2,170,000) $ 130,000 Current liabilities: Billings ($720,000) in excess of costs and profit ($400,000) $ 320,000 *Cumulative costs ($2,500,000) less cumulative loss recognized ($200,000) = $2,300,000...
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This note was uploaded on 11/16/2009 for the course ACCOUNTING 3351 taught by Professor Malkie during the Spring '09 term at ITT Tech Flint.

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