Calculate the net before-tax profit using cash basis

Reference no: EM13259358

President of Dewey, Cheatum, andHowe Construction Co., Inc. You are reviewing the financial datafor the first year of the company's operation ended 31December 19X4. Your accounting records show the following status asof 31 December 19X4.

Accountsreceivable $300,000

Accountspayable 100,000

Accrued G&Acosts 20,000

Uncompleted contractcosts 400,000

Uncompleted contractbillings 500,000

You are also aware that thefollowing has occurred during the 19X4 operational year:

Cashcollections $ 1.700,000

Cash paid-jobcosts 1,500,000

Cash paid-G&Acosts 280,000

You compare your billings with theactual value of construction placed (earned value) and realize thatdue to front-end loading on certain projects you have overbilled atotal of $50,000 on the work.

(a) Calculate the net before-tax profit for 19X4using cash basis

(b) Calculate the net before-tax profit for 19X4 usingaccrual (billings) basis.

(d) Calculate the net before-tax profit using thecompleted-contract method.

Reference no: EM13259358

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