Ch 18 HWp - Chapter 18 Homework E 18-7 Construct building...

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Chapter 18 Homework E 18-7 Construct building at price of $1,200,000 2010 2011 2012 Cost incurred to date 280,000 600,000 785,000 Est costs to be incurred 520,000 200,000 0 Customer billings to date 150,000 500,000 1,200,000 Collections to date 120,000 320,000 940,000 Compute the gross profit recognized in 2010 and 2011 and prepare JE for 2011 a1 Gross profit recognized in 2010 Contract price 1,200,000 Cost to date 280,000 Estimated addl cost 520,000 800,000 Total estimated profit 400,000 Percentage completion to date (280,000 / 800,000) 35% Gross profit recognized in 2010 140,000 Gross profit recognized in 2011 Contract price 1,200,000 Cost to date 600,000 Estimated addl cost 200,000 800,000 Total estimated profit 400,000 Percentage completion to date (600,000 / 800,000) 75% Gross profit recognized 300,000 less: GP recognized in 2010 140,000 Gross profit recognized in 2011 160,000 a2 Construction in Process (600,000-280,000) 320,000 Materials, Cash, Payables, etc 320,000 Accounts Receivable (500,000-150,000) 350,000 Billings on Construction in Process 350,000 Cash (320,000-120,000) 200,000 Accounts Receivable 200,000 Construction in Process 160,000 Construction Expense 320,000 Revenues from Long term contract 480,000 1,200,000 x (600,000-280,000)/ 800,000) b Balance Sheet and Income Statement for 2011 Income Statement (2011) - GP on long term contract 160,000 Balance Sheet (12/31/11) Current assets: Receivable - construction in process (bill 500 - coll 320) 180,000 Inventories - construction in process (600 + 140 + 160) 900,000 less billings (500,000) 400,000
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Alternative Computation (as in text) 2010 2011 2012 Billings TO-DATE given 150 500 1,200 Progress billings during the yr b 150 350 700 1,200 Cash collected TO-DATE 120 320 940 Cash collected during the year c 120 200 620 940 Percent complete would be computed: Contract price 1,200 1,200 1,200 less estimated cost: costs to date given a 280 600 785 estimated costs to complete given 520 200 - estimated total costs 800 800 785 Estimated total gross profit 400 400 415 Percent complete to date 35% 75% 100% On the basis of the data above, the following entries would be prepared to record costs of construction, progress billing, and collections. These are summaries of many individual entries. '2010
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This note was uploaded on 01/13/2011 for the course ACT AC 557 taught by Professor George during the Spring '10 term at DeVry Chicago.

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Ch 18 HWp - Chapter 18 Homework E 18-7 Construct building...

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