Problem 18-10
On March 1, 2017, Sandhill Construction Company contracted toconstruct a factory building for Fabrik Manufacturing Inc. for atotal contract price of $8,310,000. The building was completed byOctober 31, 2019. The annual contract costs incurred, estimatedcosts to complete the contract, and accumulated billings to Fabrikfor 2017, 2018, and 2019 are given below:
2017 | | 2018 | | 2019 |
| Contract costs incurred during the year | | $2,871,000 | | $2,304,900 | | $2,114,100 (2019 Row) |
| Estimated costs to complete the contract at 12/31 | | 3,509,000 | | 2,114,100 | | –0– |
| Billings to Fabrik during the year | | 3,220,000 | | 3,530,000 | | 1,560,000 |
(a) Using the percentage-of-completion method,prepare schedules to compute the profit or loss to be recognized asa result of this contract for the years ended December 31, 2017,2018, and 2019. (Ignore income taxes.)
2017
Costs to date (12/31/17) $________
Estimated Costs to Complete $________
Estimated Total Costs $________
Percent Complete ________%
Revenue Recognized $________
Costs Incurred $________
Profit/(Loss) Recognized in 2017 $________
2018
Costs to date (12/31/18) $________
Estimated Costs to Complete $________
Estimated Total Costs $________
Percent Complete ________%
Revenue Recognized in 2018 $________
Costs Incurred in 2018 $________
Profit/ (Loss) Recognized in 2018 $________
2019
_______________? $________
Total Revenue Recognized $________
Total Profit on Contract $________
Less: Profit Previously Recognized $________
Profit/(Loss) Recognized in 2019 $________
(b) Using the completed-contract method,prepare schedules to compute the profit or loss to be recognized asa result of this contract for the years ended December 31, 2017,2018, and 2019. (Ignore income taxes.)
2017 $________
2018 $________
2019 $________
