- On July 1, 2015, Anita Company entered into a contract to build an apartment building. It is estimated that the building will take 3 years to complete. The contract price was $9,600,000. The following information pertains to the construction period.
? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 2015 ? ? ? ? ? ? ? ? ? ? ? ?2016 ? ? ? ? ? ? ? ? 2017
Costs incurred each year??? ?????? ????????????? ????? $3,400,000 ??? ???????$2,400,000 ??????$2,900,000
Estimated costs to complete ? ? ? ? ? ? ? ? ? ? ? ?$4,600,000 ??? ???????$3,100,000 ? ? ? ?$?0?
Progress billings to date ??????????????????????? ??????$1,200,000 ??? ???????$4,100,000 ? ? ? ? $4,300,000
Cash collected to date ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? $900,000 ? ? ? ? ? ? ? $4,200,000 ? ? ? ? $4,000,000
- 1.?Compute?the?amount?of?gross?profit?to?be??recognized?each?year,?assuming?the?percentage-of-completion?method?is?used.?
- 2.?Prepare?all?necessary?journal?entries?for?2015??and?2016.?You?need?not?do?the?entries?for?2017.
- 3.?Prepare?a?partial?income??statement?for?the?fiscal?years?ended?December?31,?2015?and?December?31,?2016,?showing??the?revenues,?expenses,?and?gross?profit?or?loss?for?each?year?in?proper?form,??including?a?heading.?You?need?not?include?2017.
- 4.?Prepare?a?partial?balance?sheet?as?of?December??31,?2015?and?December?31,?2016,?showing?the?contract?related?accounts,??including?accounts?receivable?but?excluding?cash.??You?need?not?include?2017.
- 5.??What?was?the?total?profit?on?the??contract???Show?calculation.
- 6. ?How much does the customer still owe on the contract as of December 31, 2017?? Show calculation.
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