Forman Company has contracted to build a dam over a period of 4 years for $3,000,000. Information relating to the performance of the contract
Forman Company has contracted to build a dam over a period of 4 years for $3,000,000. Information relating to the performance of the contract is summarized as follows:
Required:
If an amount is zero, enter “0”.
1. a. Compute the profit or loss for each year of the contract under the percentage-of-completion method. Enter losses as a negative number. Forman Company Profit / Loss 2013 – 2016 2013 2014 2015 2016 Gross profit (loss) $ $ $ $ |
b. Compute the profit or loss for each year of the contract under the completed-contract method. Enter losses as a negative number. Forman Company Profit / Loss 2013 – 2016 2013 2014 2015 2016 Gross profit (loss) $ $ $ $ |
2. a. Prepare the relevant sections of the income statement for each year under the percentage-of-completion method. Forman Company Income Statement (partial) For the years ended 2013-2016 2013 2014 2015 2016 Construction revenue $ $ $ $ Construction expense Gross profit (loss) $ $ $ $ |
Prepare the relevant sections of the ending balance sheet for 2013 under the percentage-of-completion method. Forman Company Balance Sheet (partial) December 31, 2013 Current Assets Accounts receivable $ Inventory Construction in progress $ Less: Partial billings Costs and recognized profit not yet billed |
Prepare the relevant sections of the ending balance sheet for 2014 under the percentage-of-completion method. Forman Company Balance Sheet (partial) December 31, 2014 Current Assets Accounts receivable $ Inventory Construction in progress $ Less: Partial billings Costs and recognized profit not yet billed |
Prepare the relevant sections of the ending balance sheet for 2015 under the percentage-of-completion method. Forman Company Balance Sheet (partial) December 31, 2015 Current Assets Accounts receivable $ Inventory Construction in progress $ Less: Partial billings Costs not yet billed Current Liabilities Provision for loss on contract $ |
b. Prepare the relevant sections of the income statement for each year under the completed-contract method. Enter losses as a negative number. Forman Company Income Statement (partial) For the years ended 2013-2016 2013 2014 2015 2016 Gross profit (loss) $ $ $ $ |
Prepare the relevant sections of the ending balance sheet for 2013 under the completed-contract method. Forman Company Ending Balance Sheet (partial) December 31, 2013 Current Assets Accounts receivable $ Inventory Construction in progress $ Less: Partial billings Excess of costs over related billings |
Prepare the relevant sections of the ending balance sheet for 2014 under the completed-contract method. Forman Company Ending Balance Sheet (partial) December 31, 2014 Current Assets Accounts receivable $ Inventory Construction in progress $ Less: Partial billings Excess of costs over related billings |
Prepare the relevant sections of the ending balance sheet for 2015 under the completed-contract method. Forman Company Ending Balance Sheet (partial) December 31, 2015 Current Assets: Accounts receivable $ Current Liabilities: Partial billings $ Less: Construction in progress Provision for loss on contract Excess of billings and provision for loss over $ |
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