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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:

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Required:

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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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