ANSWER KEY E 5-14 In 2011, Long Construction Corporation began construction work under a three-year contract.The
E 5-14 Percentage-of-completion method; solve for unknowns
In 2011, Long Construction Corporation began construction work under a three-year contract. The contract price is $1,600,000. Long uses the percentage-of-completion method for financial reporting purposes. The financial statement presentation relating to this contract at December 31, 2011, is as follows:
Balance Sheet Accounts receivable (from construction progress billings) $30,000 Construction in progress $100,000 less: Billings on construction contract (94,000) Cost of uncompleted contracts in excess of billings Income Statement Income (before tax) on the contract recognized in 2011 $20,000
Required:
1. What was the cost of construction actually incurred in 2011?
2. How much cash was collected in 2011 on this contract?
3. What was the estimated cost to complete as of the end of 2011?
4. What was the estimated cost to complete as of the end of 2011?
