CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN: 9780357110362
Author: Murphy
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 3, Problem 87P
To determine
State the amount of income should Company WCM realize during 2019 from the work done on the mall.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
WCM Builders enters into a contract to build a shopping mall in 2019 for $6,000,000. Completion of the mall is expected to take 27 months and cost WCM $3,600,000. Upon signing the contract, WCM receives $600,000. During 2019, WCM incurs costs of $1,200,000 and receives a $1,000,000 progress payment. WCM’s forewoman estimates that the job is 50% complete at the end of 2019. How much income must WCM recognize in 2019 from the work done on the mall?
Do not round intermediate computations.
WCM will recognize $ of gross income from the contract in 2019.
WCM Builders enters into a contract to build a shopping mall in 2019 for $6,000,000. Completion of the mall is expected to take 27 months and cost WCM $3,600,000. Upon signing the contract, WCM receives $600,000. During 2020, WCM incurs costs of $1,200,000 and receives a $1,000,000 progress payment. WCM’s forewoman estimates that the job is 50% complete at the end of 2020. How much income must WCM recognize in 2020 from the work done on the mall?
Seasons Construction is constructing an office building under contract for Cannon
Company and uses the percentage-of-completion method. The contract calls for
progress billings and payments of $5,000,000 each year. The total contract price is
$15,000,000 and Seasons estimates total costs of $12,000,00O. Seasons estimates
that the building will take 3 years to complete, and commences construction on
January 2, 2021.
At December 31, 2021, Seasons estimates that it is 30% complete with the
construction, based on costs incurred, which are consistent with the original
estimate.
Prepare the journal entries required in 2021, if any, to record construction costs,
revenues, and billings.
Chapter 3 Solutions
CONCEPTS IN FED.TAX.,2020-W/ACCESS
Ch. 3 - Prob. 1DQCh. 3 - Prob. 2DQCh. 3 - Prob. 3DQCh. 3 - Prob. 4DQCh. 3 - Prob. 5DQCh. 3 - Prob. 6DQCh. 3 - Prob. 7DQCh. 3 - Prob. 8DQCh. 3 - Prob. 9DQCh. 3 - Prob. 10DQ
Ch. 3 - Prob. 11DQCh. 3 - Prob. 12DQCh. 3 - Prob. 13DQCh. 3 - Prob. 14DQCh. 3 - Prob. 15DQCh. 3 - Prob. 16DQCh. 3 - Prob. 17DQCh. 3 - Prob. 18DQCh. 3 - Prob. 19DQCh. 3 - Prob. 20DQCh. 3 - Prob. 21DQCh. 3 - Are all losses realized on the sale of capital...Ch. 3 - Prob. 23DQCh. 3 - Prob. 24DQCh. 3 - Prob. 25DQCh. 3 - Prob. 26DQCh. 3 - Prob. 27DQCh. 3 - Prob. 28DQCh. 3 - Prob. 29DQCh. 3 - Prob. 30PCh. 3 - Prob. 31PCh. 3 - Prob. 32PCh. 3 - Prob. 33PCh. 3 - How much taxable income should each of the...Ch. 3 - Prob. 35PCh. 3 - Prob. 36PCh. 3 - Prob. 37PCh. 3 - Prob. 38PCh. 3 - Prob. 39PCh. 3 - Minnie owns a qualified annuity that cost 78,000....Ch. 3 - Prob. 41PCh. 3 - Prob. 42PCh. 3 - Prob. 43PCh. 3 - Prob. 44PCh. 3 - Prob. 45PCh. 3 - Prob. 46PCh. 3 - Devi is the chief executive officer of Nishida...Ch. 3 - Prob. 48PCh. 3 - Prob. 49PCh. 3 - Prob. 50PCh. 3 - Prob. 51PCh. 3 - Prob. 52PCh. 3 - Prob. 53PCh. 3 - Prob. 54PCh. 3 - Prob. 55PCh. 3 - Prob. 56PCh. 3 - Prob. 57PCh. 3 - Prob. 58PCh. 3 - Prob. 59PCh. 3 - Prob. 60PCh. 3 - Prob. 61PCh. 3 - Prob. 62PCh. 3 - Determine whether the taxpayer has income that is...Ch. 3 - Prob. 64PCh. 3 - Prob. 65PCh. 3 - Prob. 66PCh. 3 - Prob. 67PCh. 3 - Prob. 68PCh. 3 - Prob. 69PCh. 3 - Prob. 70PCh. 3 - Prob. 71PCh. 3 - Prob. 72PCh. 3 - Prob. 73PCh. 3 - Prob. 74PCh. 3 - Prob. 75PCh. 3 - Prob. 76PCh. 3 - During the last five months of the year, Dwana...Ch. 3 - Prob. 78PCh. 3 - Prob. 79PCh. 3 - Prob. 80PCh. 3 - Prob. 81PCh. 3 - Lorene, Inc., owns an apartment complex. The terms...Ch. 3 - Prob. 83PCh. 3 - Prob. 84PCh. 3 - Prob. 85PCh. 3 - Prob. 86PCh. 3 - Prob. 87PCh. 3 - Prob. 88PCh. 3 - Prob. 89IIPCh. 3 - Prob. 90IIPCh. 3 - Prob. 91IIPCh. 3 - Prob. 92IIPCh. 3 - Prob. 93IIPCh. 3 - Prob. 94IIPCh. 3 - Prob. 95IIPCh. 3 - Prob. 96IIPCh. 3 - Prob. 97IIPCh. 3 - Prob. 105DCCh. 3 - Kerry is employed as a ticket vendor at an...Ch. 3 - Prob. 107DCCh. 3 - Prob. 108DCCh. 3 - Prob. 109EDC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?arrow_forwardKhodra Construction was contracted to construct an apartment complex for NDC. The contract calls for progress billings and payments of $620,000 each quarter. The total contract price is $7,440,000 and Khodra estimates total costs of $7,100,000. Further, Khodra estimates that the complex will take 3 years to complete. Construction began on March 1, 2021. At December 31, 2021, Khodra estimated that construction was 30% complete based on costs incurred. What total amount of Revenue from Long-Term Contracts was recognized for 2021 and what was the balance in the Accounts Receivable account assuming NDC had paid $1,800,000 thus far for 2021?arrow_forwardKhodra Construction was contracted to construct an apartment complex for NDC. The contract calls for progress billings and payments of $620,000 each quarter. The total contract price is $7,440,000 and Khodra estimates total costs of $7,100,000. Further, Khodra estimates that the complex will take 3 years to complete. Construction began on March 1, 2021. At December 31, 2021, Khodra estimated that construction was 30% complete based on costs incurred. What total amount of Revenue from Long-Term Contracts was recognized for 2021 and what was the balance in the Accounts Receivable account assuming NDC had paid $1,800,000 thus far for 2021? Revenue $Answer Accounts Receivable $Answerarrow_forward
- Pina, Inc. began work on a $6,759,000 contract in 2020 to construct an office building. During 2020, Pina, Inc. incurred costs of $1,641,860, billed its customers for $1,319,000, and collected $1,054,000. At December 31, 2020, the estimated additional costs to complete the project total $3,187,140.Prepare Pina’s 2020 journal entries using the percentage-of-completion method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For costs incurred use account Materials, Cash, Payables. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title to record costs incurred enter a debit amount enter a credit amount enter an account title to record costs incurred enter a debit amount enter a credit amount (To record costs incurred.) enter an account title to record billings enter a debit amount enter a…arrow_forwardSeasons Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1,550,000 each quarter. The total contract price is $18,600,000 and Seasons estimates total costs of $17,750,000. Seasons estimates that the building will take 3 years to complete, and commences construction on January 2, 2021. At December 31, 2022, Seasons Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $18,000,000 due to unanticipated price increases. What is reported in the balance sheet at December 31, 2022 for Seasons as the difference between the Construction in Process and the Billings on Construction in Process accounts, and is it a debit or a credit? Difference between the accounts Debit/Credit a. $4,225,000 Credit b. $1,550,000 Debit c. $1,100,000 Debit d. $1,550,000 Creditarrow_forwardIn 2020, Crane Contractors began construction on an office building. The building was expected to cost $46,310,000 in total, and was expected to be completed in early 2022. The customer was to pay Crane $48,760,000 for the building. Crane was able to use percentage-of-completion accounting for the project, and at the end of 2020 had accumulated $11,577,500 in cost. Crane estimated that the costs to complete the construction were in line with the original expected total costs. During 2021, there was a lumber shortage, a strike by construction workers, and various other incidents that dramatically raised costs in the construction industry. As a result, at the end of 2021, Crane estimated that the office building would cost $4,780,000 in total. To the end of 2021, Crane had spent $38,828,400 on constructing the office building. Calculate the revenue to be recognized by Crane for the 2021 fiscal year. Revenue to be recognized $ $24,867,600 Prepare the journal entry to record revenue,…arrow_forward
- Turner, Inc. began work on a $7,000,000 contract in 2020 to construct an office building. During 2020, Turner, Inc. incurred costs of $1,700,000, billed its customers for $1,200,000, and collected $960,000. At December 31, 2020, the estimated additional costs to complete the project total $3,300,000. Prepare Turner's 2020 journal entries using the percentage-of-completion method.arrow_forwardInfotech Bhd enters a contract on 1 January 2019 to produce software for a customer for RM5,000,000. Infotech Bhd receives RM2,000,000 from the customer upon contract signing and the balance at the completion of the contract. According to the contract, the customer controls the system during the creation of the program. Infotech Bhd estimates that it will take two years to complete the project and uses the number of labor hours to estimate the rate of completion. Macro Tech spends 30,000 hours in the first year of the contract and another 20,000 hours the second year. Required: Prepare the entries recorded by Macro Tech over the life of this contract. Assume that all payments are complete by the end of 2020.arrow_forwardInfotech Bhd enters a contract on 1 January 2019 to produce software for a customer for RM7,000,000. Infotech Bhd receives RM2,000,000 from the customer upon contract signing and the balance at the completion of the contract. According to the contract, the customer controls the system during the creation of the program. Infotech Bhd estimates that it will take two years to complete the project and uses the number of labor hours to estimate the rate of completion. Infotech spends 40,000 hours in the first year of the contract and another 10,000 hours the second year Prepare the entries recorded by Infotech over the life of this contract. Assume that all payments are complete by the end of 2020arrow_forward
- Flounder, Inc. began work on a $6,504,000 contract in 2020 to construct an office building. During 2020, Flounder, Inc. incurred costs of $1,639,900, billed its customers for $1,300,000, and collected $1,055,000. At December 31, 2020, the estimated additional costs to complete the project total $3,650,100.Prepare Flounder’s 2020 journal entries using the percentage-of-completion method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For costs incurred use account Materials, Cash, Payables. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)arrow_forwardYellowStone Construction is constructing an office building under contract for LimeStone Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1300000 each quarter. The total contract price is $15600000 and YellowStone estimates total costs of $17500000. YellowStone estimates that the building will take 3 years to complete, and commences construction on January 2, 2021. At December 31, 2022, YellowStone Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $17750000 due to unanticipated price increases.YellowStone Construction completes the remaining 25% of the building construction on December 31, 2023, as scheduled. At that time the total costs of construction are $18500000. What is the total amount of Revenue from Long-Term Contracts and Construction Expenses that YellowStone will recognize for the year ended December 31, 2023? Revenue Expenses…arrow_forwardTamra, Inc. began work on a $ 7000,000 contract in 2019 to construct an office building. During 2010, Tamra, Inc. incurred costs of $1,700,00, billed their customers for $1,200,000, and collected $960,000. At December 31,2019, the estimated future costs to complete the project total $3,300,000. Instructions: compute Tamra’s Gross profit to be recognized in 2019?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning