Stoney Run Construction Company (U.S. GAAP) enters into a 3-yearcontract to build a new...

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Accounting

Stoney Run Construction Company (U.S. GAAP) enters into a 3-yearcontract to build a new warehouse facility. Information for Years1, 2, and 3 is shown below:
Year 1
Year 2
Year 3
Sale price
$2,800,000
$2,800,000
$2,800,000
Estimated costs
1,600,000
2,000,000
2,000,000
Costs incurred to date (paid in cash)
400,000
900,000
2,000,000
Billed to date
250,000
1,150,000
2,800,000
Received in cash to date
190,000
950,000
2,800,000
Question 4:
Calculate the gross profit booked in Year 2:
Question 5:
Book the following journal entries for Year 2:
1-Record costs incurred
2-Record billings on contract
3-Record payments received
4-Record revenue/cost during construction period

Answer & Explanation Solved by verified expert

4.3 Ratings (756 Votes)

4 Gross Profit booked in year 2 Gross Profit upto date in 2nd year Gross Profit booked in year 1 Gross Profit Booked in year 1 complete in year 1 Cost incurred upto date Total Estimated cost 4000001600000 25 See Answer

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In: AccountingStoney Run Construction Company (U.S. GAAP) enters into a 3-yearcontract to build a new warehouse...Stoney Run Construction Company (U.S. GAAP) enters into a 3-yearcontract to build a new warehouse facility. Information for Years1, 2, and 3 is shown below:Year 1Year 2Year 3Sale price$2,800,000$2,800,000$2,800,000Estimated costs1,600,0002,000,0002,000,000Costs incurred to date (paid in cash)400,000900,0002,000,000Billed to date250,0001,150,0002,800,000Received in cash to date190,000950,0002,800,000Question 4:Calculate the gross profit booked in Year 2:Question 5:Book the following journal entries for Year 2:1-Record costs incurred2-Record billings on contract3-Record payments received4-Record revenue/cost during construction period

	Year 1	Year 2	Year 3
Sale price	$2,800,000	$2,800,000	$2,800,000
Estimated costs	1,600,000	2,000,000	2,000,000
Costs incurred to date (paid in cash)	400,000	900,000	2,000,000
Billed to date	250,000	1,150,000	2,800,000
Received in cash to date	190,000	950,000	2,800,000