Calculate the amount of gross profit, Cost Accounting

Samuel Construction Company engaged in a contract to construct a building on 1 July 2011 with completion of the contract by the 30 June 2014.  The contract price amounted to a total of $3 600 000.  Total estimated costs to build the building were $3 200 000 at the commencement of the contract.  The company has a June 30 year end.  The following information relates to construction during the period of the contract:

 

Year End

30 June 2012

$

Year End

30 June 2013

$

Year End

30 June 2014

$

Costs incurred during the year

800 000

1 000 000

1 700 000

Estimated costs to complete

2 400 000

1 600 000

      -

Progress billings during the year

720 000

1 920 000

960 000

Cash collected during the year

600 000

1 200 000

1 600 000

Required:

Assuming that the contract outcome can be reliably measured and as a result Samuel Construction Company adopts the percentage of completion (cost basis method):

(i) Calculate the amount of gross profit that should be recognised for years ending 30 June 2012, 30 June 2013 and 30 June 2014.  Show all workings.

(ii) Calculate the amount of revenue that should be recognised for years ending 30 June 2012, 30 June 2013 and 30 June 2014.  Show all workings.

(iii) Prepare the necessary journal entries for the year ending 30 June 2013.

 

Note: For the percentage-of-completion calculation, round to the second decimal place (eg 41.75%).  Round any currency calculations to the nearest whole dollar.

Posted Date: 3/30/2013 6:22:28 AM | Location : United States







Related Discussions:- Calculate the amount of gross profit, Assignment Help, Ask Question on Calculate the amount of gross profit, Get Answer, Expert's Help, Calculate the amount of gross profit Discussions

Write discussion on Calculate the amount of gross profit
Your posts are moderated
Related Questions
ANNUAL DEMAND = 2400 UNITS ORDERING COST PER UNIT = RS.4.00/- UNIT PRICE = RS 2.40/- STORAGE COST = 2% P.A INTEREST RATE = 10 % P.A LEAD TIME = HALF MONTH CALCULATE ECONOMIC ORDER

Disadvantages of Standard Costing 1. The system of standard costing is very expensive to install : A lot of money is spent in studying output requirements in terms of materia

Mission Foods produces two flavors of tacos, chicken and fish, with the following characteristics: Chicken Fish Selling price per taco $3.00 $4.50 Variable cost p

Kenner company produces two products: SR200 and TX500. Budged sales for four months are as follows; SR200 TX500 May 8,000 20,000 June 13,000 32,000 July 11,000 39,000 August 18,000


How would I calculate the debt amortization for a bond issued at discount with a maturity of 12 years, market interest rate at issue 10% annually, 5% semi annually, and has a state

Gerona Company authorized the sale of $300,000 of 10%, 10-year debentures on January 1, 2008. Interest is payable on January 1 and July 1. The entire issue was sold on April 1, 200

I have a project for cost account and I need the solution for it

question and answer: XYZ trading purchased 6,850 killos of material at a total cost of 21,920.00. The material price variance was 1,370.00 favorable. The standard price per killo w

Question PART A A company manufactures a single product and the data concerning the product is as follows: - Sales price of $10 - Marginal cost of $6. - Fixed