1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
forsale [732]
2 years ago
6

During 2020, Concord Company started a construction job with a contract price of $1,580,000. The job was completed in 2022. The

following information is available.
2020 2021 2022
Costs incurred to date $430,000 $766,500 $1,067,000
Estimated costs to complete 570,000 328,500 –0–
Billings to date 297,000 900,000 1,580,000
Collections to date 272,000 817,000 1,411,000
1. Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
Gross profit recognized in 2017 225,700
Gross profit recognized in 2018 175,140
Gross profit recognized in 2019 149,160
2. Prepare all necessary journal entries for 2018.
Business
1 answer:
masya89 [10]2 years ago
4 0

Answer:

1. 2020 $249,400

2021 $90,100

2022 $422,900

2. Dr Construction in process$336,500

Materials,cash, payables etc $336,500

Dr Accounts receivable $603,000

Cr Billings on construction in process $603,000

Dr Cash $545,000

Cr Accounts receivable $547,000

Dr Construction in process ($336,500

Dr Construction expenses $90,100

Cr Revenue from long term contracts $426,600

Explanation:

1. Computation for the amount of gross profit to be recognised each year, using percentage of completion method.

2020 2021 2022

Contract price $1,580,000 $1,580,000 $1,580,000

Less: Estimated cost to date ($430,000) ($766,500) ($1,067,000)

Estimated cost to complete (570,000) (328,500) 0

Estimated total costs ($1,000,000) ($1,095,000) ($1,067,000)

Estimated gross profit $580,000 $485,000 $513,000

($1,580,000-$1,000,000=$580,000)

($1,580,000-$1,095,000=$485,000)

($1,580,000-$1,067,000=$513,000)

Percentage completed 43% 70% 100%

($430,000/1,000,000=43%)

($766,500/$1,095,000=70%)

($1,067,000/$1,067,000=100%)

Revenue recognised in prior year - $249,400 $90,100

(43%*$580,000=$249,400)

($339,500-$249,400=$90,100)

Total revenue recognised $249,400 $339,500 $513,000

(70%*$485,000=$339,500)

Gross profit recognised $249,400 $90,100 $422,900

($513,000-$99,100=$422,900)

Therefore Gross profit recognized are :

Gross profit recognized in 2020 $249,400

Gross profit recognized in 2021 $90,100

Gross profit recognized in 2022 $422,900

2. Preparation of all necessary journal entries for 2020,2021,2022

Dr Construction in process($766,500-430,000) $336,500

Materials,cash, payables etc $336,500

(To record cost of construction)

Dr Accounts receivable(900,000-297,000) $603,000

Cr Billings on construction in process $603,000

(To record process Billings)

Dr Cash(817,000-272,000) $545,000

Cr Accounts receivable $547,000

(To record collections)

Dr Construction in process ($766,500-430,000) $336,500

Dr Construction expenses $90,100

Cr Revenue from long term contracts $426,600

($336,500+$90,100)

(To recognise revenue and gross profit)

You might be interested in
PRO FORMA INCOME STATEMENT Austin Grocers recently reported the following 2016 income statement (in millions of dollars): Sales
padilas [110]

Answer:

Net income = $169.2

Growth in dividend = 76.25%

Explanation:

The projected figures are as below:

Sales = $700 x (1 + 15%) = $805 <em>(15% increase in sales)</em>

Operating costs including depreciation = $805 x 60% = $483 <em>(60% of sales)</em>

Interest expense = 40 <em>(remain constant)</em>

EBIT = Sales - Operating costs including depreciation = $805 - $483 = $322

EBT = EBIT - Interest expense = $322 - $40 = $282

Net income = EBT x (1 - Tax rate) = $282 x (1 - 40$) = $169.2

Dividend = Net income x Dividend payout ratio = $169.2 x (32/96) = $56.4

Growth in dividend = $56.4/$32 = 76.25%

<em />

4 0
3 years ago
Elliot is suing Acme, Inc., for a breach of contract, but because Acme has very little in assets, he asks the court to pierce th
Sergeu [11.5K]

Answer: The court would likely approve Elliot's request in the following situation: <u><em>The corporation was under-capitalized from the beginning, and never had sufficient assets to operate as a viable business.</em></u>

Under the given scenario i.e. for a breach of contract , the condition will apply if the corporation i.e. Acme Inc. was under-capitalized from the start, and they never had predominating assets to work as a viable organization.

<u><em>Therefore the correct option is (a)</em></u>

7 0
3 years ago
Suppose the economy starts off producing Natural Real GDP. Next, aggregate supply rises, ceteris paribus. As a result, the price
lord [1]

Answer:

The price level will be equal to what it was before there was a rise in the aggregate supply.

Explanation:

In economics, natural gross domestic product (Natural Real GDP) can be described as the maximum level of real GDP that can be  sustained by an economy over the long term. The Natural Real GDP is also known as the potential output.

From the question, since the economy has moved back to producing Natural Real GDP which is the maximum real GDP sustainable, the price level will be equal to what it was before there was a rise in the aggregate supply.

Therefore, the price level will be equal to what it was before there was a rise in the aggregate supply.

8 0
3 years ago
What is the definition of organization ? Briefly explain each part of the definition?​
Semenov [28]

organization isn a group or team that works together to accomplish a task

6 0
2 years ago
17-16. Do you think interns who feel they’ve had a negative or exploitive relationship with a company should file lawsuits? Why
katrin2010 [14]

Answer: The answer is provided below

Explanation:

An intern is a student or a trainee who works, sometimes without getting paid, so as too gain work experience or satisfy the requirements for a qualification.

Internship comes into legal agreement by signing an internship agreement. Such agreement is signed by the organization and the intern. The violation of intern contract is enforceable by law.

Companies usually have committee that evaluate issues that may disturb the employees or interns at their workplace. In a situation whereby the intern feels an issue cannot be resolved within the organization, the intern can go for lawsuits.

Company's actions such as discrimination at work, sexual harrasment are example of cases that may justify am intern going to the court. Even though many states have passed laws to protect interns in organizations, an intern can still file lawsuits in cases of severe misconducts.

6 0
3 years ago
Other questions:
  • Spielberg Company's general ledger shows a checking account balance of $22,970 on July 31, 2021. The July cash receipts of $1,88
    10·1 answer
  • In a longitudinal study of individuals who reached age 55 with an optimal cardiometabolic risk profile, men had a risk of heart
    14·2 answers
  • Next week, Mortimer is preparing to go to work for the Illinois department of Child Services. He was surprised when his friends
    6·1 answer
  • A ________ may be desirable as a market entry strategy if one company does not have the necessary financial
    8·1 answer
  • Who files one of the 1040 series of tax forms??
    14·2 answers
  • Coaches can receive a bonus from the booster club at the conclusion of a season.
    9·1 answer
  • A company makes a credit sale of $750 on June 13, terms 2/10, n/30, on which it grants a return of $50 on June 16. What amount i
    11·1 answer
  • Hunkins Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 33,000 Indi
    9·1 answer
  • Anyone wants my number for 84 points
    12·1 answer
  • The IRS has the authority to assess a monetary penalty to who
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!