Part 1 A Aristocracy Construction Company began work on a new building project o
ID: 2483297 • Letter: P
Question
Part 1 A
Aristocracy Construction Company began work on a new building project on January 1, 2015. The project is to be completed by December 31, 2017, for a fixed price of $108 million. The following are the actual costs incurred and estimates of remaining costs to complete the project that were made by the accounting staff:
Years
Actual costs incurred in each year
Estimated remaining costs to complete the project (measured at Dec. 31 of each year)
2015
30 million
60 million
2016
45 million
45 million
2017
35 million
0
What amount of gross profit (or loss) would Aristocracy record on this project in each year, assuming that Aristocracy recognizes revenue for this project upon completion of the project? Place answers in the table below. Loss(es) should be enclosed within parenthesis.
Years
Gross Profit (or Loss) recognized
2015
2016
2017
Part 1 B
Ballister Builders was the low bidder on a construction project to build a DOT facility for $2,500,000. The project was begun in 2015 and completed in 2017. Cost and other data are presented below:
2015
2016
2017
Costs incurred during the year
350,000
1,100,000
650,000
Estimated costs to complete
1,050,000
950,000
0
What amount of gross profit (or loss) would Ballister record on this project in each year, assuming that Ballister recognizes revenue for this project over time according to percentage of completion? Place answers in the table below. Loss(es) should be enclosed within parenthesis.
Years
Gross Profit (or Loss) recognized
2015
2016
2017
Keep percentages to 2 decimal places. Round dollar amounts to the nearest dollar.
Aristocracy Construction Company began work on a new building project on January 1, 2015. The project is to be completed by December 31, 2017, for a fixed price of $108 million. The following are the actual costs incurred and estimates of remaining costs to complete the project that were made by the accounting staff:
Years
Actual costs incurred in each year
Estimated remaining costs to complete the project (measured at Dec. 31 of each year)
2015
30 million
60 million
2016
45 million
45 million
2017
35 million
0
What amount of gross profit (or loss) would Aristocracy record on this project in each year, assuming that Aristocracy recognizes revenue for this project upon completion of the project? Place answers in the table below. Loss(es) should be enclosed within parenthesis.
Years
Gross Profit (or Loss) recognized
2015
2016
2017
Explanation / Answer
Part 1-a
Part1B
Particulars 2015 (Million $) 2016 (Million $) 2017 (Million $) Project cost 108 108 108 Cost upto date 30 75 110 costs to complete the project 60 45 0 Toatl Cost 90 120 110 Gross Profit (Loss) 18 (12) (2) Gross Profit (Loss) to be recognised 0 0 (2)