Reference no: EM132480582
Question - On July 1, 2020, Grouper Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,900,000. On July 1, Grouper estimated that it would take between 2 and 3 years to complete the building. On December 31, 2022, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2020, 2021, and 2022.
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At 12/31/20
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At 12/31/21
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At 12/31/22
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Contract costs incurred to date
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$315,000
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$1,140,000
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$2,096,200
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Estimated costs to complete the contract
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1,185,000
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860,000
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-0-
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Billings to Gumbel
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290,000
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1,110,000
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1,840,000
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Required -
(a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2020, 2021, and 2022.
b) Using the completed-contract method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2020, 2021, and 2022.
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Compute the amount of gross profit
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Prepare journal entries to update depreciation
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What amount of revenue should blossom report for the sale
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Determine the cost of the land and the cost of the building
: Determine the cost of the land and the cost of the building as they should be recorded on the books of Cheyenne Co. Assume that the land survey
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Prepare schedules to compute the profit or loss
: Prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2020, 2021, and 2022
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What amount will be shown as prepaid insurance
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What amount should be reported in stockholders equity
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Prepare the required payments on termination
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Compute net sales for the two months ended December
: Sales Discounts, and Credit Card Discounts are treated as contra-revenues; compute net sales for the two months ended December 31
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