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

ACC 620: Financial Reporting II is a continuation of ACC 610. In ACC 620, your focus in the final project will be on developing skills in critical thinking and applying accounting theories and practices according to generally accepted accounting principles (GAAP).
June 28, 2019
On January 1, West Company had outstanding 10,000 shares of $10 par common stock, which had been originally issued at an average price of $35
June 28, 2019

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:

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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