405ch18solutions2010

405ch18solutions2010 - EXERCISE 18-4 (2025 minutes) (a)...

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EXERCISE 18-4 (20–25 minutes) (a) Gross profit recognized in: 2010 2011 2012 Contract price $1,600,000 $1,600,000 $1,600,000 Costs: Costs to date $400,000 $825,000 $1,070,000 Estimated costs to complete 600,000 1,000,000 275,000 1,100,000 0 1,070,000 Total estimated profit 600,000 500,000 530,000 Percentage completed to date 40% * 75% ** 100% Total gross profit recognized 240,000 375,000 530,000 Less: Gross profit recognized in previous years 0 240,000 375,000 Gross profit recognized in current year $ 240,000 $ 135,000 $ 155,000 * *$400,000 ÷ $1,000,000**$825,000 ÷ $1,100,000
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EXERCISE 18-4 (Continued) (b) Construction in Process ($825,000 – $400,000). ... 425,000 Materials, Cash, Payables, etc. .......................... 425,000Accounts Receivable ($900,000 – $300,000) 600,000 Billings on Construction in Process. .............. 600,000 Cash ($810,000 – $270,000). .................................... 540,000 Accounts Receivable. ....................................... 540,000 Construction Expenses. .......................................... 425,000 Construction in Process. ......................................... 135,000 Revenue from Long-Term Contracts. ............. 560,000* *$1,600,000 X (75% – 40%) (c) Gross profit recognized in: 2010 2011 2012 Gross profit $–0– $–0– $530,000* *$1,600,000 – $1,070,000 EXERCISE 18-7 (25–30 minutes) (a) 1. Gross profit recognized in 2010: Contract price. ................................................ $1,200,000 Costs: Costs to date. .......................................... $280,000 Estimated additional costs. ................... 520,000 800,000 Total estimated profit. .................................... 400,000
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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 Costs: Costs to date. .......................................... $600,000 Estimated additional costs. ................... 200,000 800,000 Total estimated profit. .................................... 400,000 Percentage completion to date ($600,000/$800,000). ................................... 75% Total gross profit recognized. ....................... 300,000 Less: Gross profit recognized in 2010. ....... 14 0,000 Gross profit recognized in 2011. .................. $ 160,000
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EXERCISE 18-7 (Continued) 2. 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
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This note was uploaded on 11/05/2011 for the course ACCT 405 taught by Professor Caylor during the Summer '11 term at South Carolina.

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405ch18solutions2010 - EXERCISE 18-4 (2025 minutes) (a)...

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