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OVERTIME
Shortcut (2021) Contract Price 500,000 510,000 510, Cost Incurred per year 140,000 160,000 92,500 96, Add: Cost Incurred in prior years 0 140,000 300,000 296, Cost Incurred to date 140,000 300,000 392,500 392, Add: Estimated cost to complete 260,000 100,000 - Less: Total estimated cost 400,000 400,000 392, Total estimated gross profit 100,000 110,000 117, Percentage of completion to date 35% 74% 100% Gross profit earned to date 35,000 81,400 117, Less: GP from prior years - 35,000 81, Gross profit for the year 35,000 46,400 36, Alternative: 2019 2020 2021 Contract price 500,000 510,000 510, Percentage of completion to date 35% 74% 100% Revenue to date 175,000 377,400 510, Less: Revenue from prior years 0 175,000 377, Revenue for the year 175,000 202,400 132, Less: Cost of construction 140,000 156,000 96, Gross profit for the year 35,000 46,400 36, POINT IN TIME 2019 2020 2021
Revenue to date 140,000 296,000 510, Less: Revenue from prior years 0 140,000 296, Revenue for the year 140,000 156,000 214, Less: Cost of construction 140,000 156,000 96, Gross profit for the year 0 0 117, REQUIREMENT A OVERTIME 2019 Construction in Progress 140, Cash 140, To record cash incurred during the year. Accounts Receivable 187, Progress Billings 187, To record contract billings. Cash 140, Accounts Receivable 140, To record collection. Cost of Construction 140, Construction in Progress 35, Revenue 175, To record revenue. 2020 Construction in Progress 156, Materials Inventory 4, Cash 160, To record cash incurred during the year. Accounts Receivable 140, Progress Billings 140, To record contract billings. Cash 160, Accounts Receivable 160, To record collection. Cost of Construction 156, Construction in Progress 46, Revenue 202, To record revenue. 2021
Progress Billings 140, To record contract billings. Cash 160, Accounts Receivable 160, To record collection. Cost of Construction 156, Revenue 156, To record revenue. 2021 Construction in Progress 96, Materials Inventory 4, Cash 92, To record cash incurred during the year. Accounts Receivable 182, Progress Billings 182, To record contract billings. Cash 210, Accounts Receivable 210, To record collection. Cost of Construction 96, Construction in Progress 117, Revenue 214, To record revenue. Progress Billings Construction in Progress 510, To record closing of accounts. 510,
REQUIREMENT B
OVERTIME
Construction in Progress Progress Billings 2019, beg 140,000 187, 35, 2019, end 175,000 187, 2020, beg 156,000 140, 46, 2020, end 377,400 327, 2021, beg 96,500 182, 2021, end 36,100 510,000 510, 2019 2020 Construction in Progress 175,000 377, Less: Progress Billings 187,500 327, Current Asset (Liability) (12,500) 49,
Summary of Answers for Requirement B
- B
- A
- D
- A
- B
- B
7. B
8. B
9. D
10. A
11. A
12. D
