A.

Cooper 1
Aleshia Cooper
Thursday, 13 February, 2014
Accounts 305 -01
Mr. Terrance Richards
Homework Questions: P 18 -2, 18-3, 18-4
Problem 18-2

Contract price
Less estimated cost:
Costs to date
Estimated cost to
complete
Estimated total cost
Estimated total gross
profit

2010
$900,000

2011
$900,000

2012
$900,000

270,000
330,000

450,000
150,000

610,000

600,000
$300,000

600,000
$300,000

610,000
$290,000

$270,000/$600,000*300,000
$450,000/$600,000*300,000
2010 gross profit
Gross profit in 2011
20102011 gross profit
Gross profit in 2012

Total billings
Total cost
Gross profit in 2012

2010
$135,000

2011

2012
$225,000
$135,000
$ 90,000

$900,000
$610,000
$290,000

$290,000
225,000
$ 65,000

A. Cooper 2

Problem 18-3

Contract price
Less estimated cost:
Costs to date
Estimated cost to
complete
Estimated total cost
Estimated total gross
profit

Percentage
completed to date
Total gross profit
Gross profit in
previous years
Gross profit in
current year

2010
$3,000,000

2011
$3,000,000

2012
$3,000,000

$ 600,000
$1,400,000

$1,560,000
$520,000

$2,100,000

$2,000,000
$1,000,000

2,080,000
$920,000

2,100,000
$900,000

2010
600,000/$2,000,000
30%

2011
1,560,000/$2,080,000
75%

2012
100%

300,000
0

690,000
300,000

900,000
690,000

300,000

$ 390,000

$ 210,000

ACCOUNT
Construction in Process

Debit
540,000

540,000

Materials

Accounts Receivable

Credit

1,000,000
1,000,000

Billings on Construction in
Process

Cash

900,000
900,000

Accounts Receivable

Construction Expenses

540,000

Construction in process

210,000

A. Cooper 3
Revenue

from

750,000

Long-Term

Contracts

Billings on Construction in
Process
3,000,000

Construction in Process

3,000,000

Chance Company
Balance Sheet
For the Year Ended December 31, 2011

Accounts

Debit

Credit

Assets
Current assets
Accounts receivable($2,000,000 $1,950,000)
Inventories
Construction in process , ($1,560,000+
$690,000)
Billings
Costs and recognized profit in excess of
billings

$ 50,000
$2,250,000
2,000,000
250,000

A. Cooper 4

Problem 18-4

Contract price
Less estimated cost:
Costs to date
Estimated cost to
complete
Estimated total cost
Estimated total gross
profit

2010
$6,600,000

2011
$6,600,000

2012
$6,600,000

1,620,000
3,780,000

3,850,000
1,650,000

5,500,000

5,400,000
$1,200,000

5,500,000
$1,100,000

5,500,000
$1,010,000

$1,620,000/$5,400,000*1,200,000
$3,850,000/$5,500,000*1,100,000
2010 gross profit
Gross profit in 2011
20102011 gross profit
Gross profit in 2012

2010
$360,000

2011

2012

$770,000
$360,000
$ 410,000
770,000
$240,000

Hewitt Construction Company

Balance Sheet
For the Year Ended December 31, 2011

Accounts
Assets
Current assets
Accounts receivable($3,300,000 $2,800,000)

Debit

Credit
$ 500,000

A. Cooper 5
Inventories
Construction in process ,600,000*($3,850,000
$5,500,000)
Billings
Costs and recognized profit in excess of
billings

$4,620,000
3,300,000
1,320,000