Brady Construction Company contracted to build an apartment complex for a price
ID: 2550214 • Letter: B
Question
Brady Construction Company contracted to build an apartment complex for a price of $5,200,000. Construction began in 2018 and was completed in 2020. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars.
Costs Incurred During Year
(As of the End of the Year)
Situation
2018
2019
2020
2018
2019
2020
Required:
Complete the following table. (Do not round intermediate calculations. Enter answers in dollars. Round your final answers to the nearest whole dollar. Negative amounts should be indicated by a minus sign.)
Required:
Complete the following table. (Do not round intermediate calculations. Enter answers in dollars. Round your final answers to the nearest whole dollar. Negative amounts should be indicated by a minus sign.)
Costs Incurred During Year
(As of the End of the Year)
Situation
2018
2019
2020
2018
2019
2020
1 1,520 2,190 960 3,150 960 — 2 1,520 960 2,480 3,150 2,480 — 3 1,520 2,190 1,760 3,150 1,660 — 4 520 3,020 1,040 3,640 885 — 5 520 3,020 1,440 3,640 1,660 — 6 520 3,020 2,000 4,800 1,880 —Required:
Complete the following table. (Do not round intermediate calculations. Enter answers in dollars. Round your final answers to the nearest whole dollar. Negative amounts should be indicated by a minus sign.)
Required:
Complete the following table. (Do not round intermediate calculations. Enter answers in dollars. Round your final answers to the nearest whole dollar. Negative amounts should be indicated by a minus sign.)
Explanation / Answer
Gross Profit (Loss) Recognized ( $ in 000) Situation-1 Revenue Recognized Over Time Revenue recognised Upon Completion 2018 2019 2020 2018 2019 2020 1 $172.51 $1,252.73 $2,814.76 $0.00 $0.00 $4,240.00 2 $172.51 $318.66 $2,228.84 $0.00 $0.00 $2,720.00 3 $172.51 $595.42 $2,672.08 $0.00 $0.00 $3,440.00 4 $130.00 $871.51 $3,158.49 $0.00 $0.00 $4,160.00 5 $130.00 $205.56 $3,424.44 $0.00 $0.00 $3,760.00 6 -$11.73 $196.63 $3,015.10 -$11.73 $184.90 $3,200.00 Revenue Recognised in 2018 ($in 000) Situation Cost Incurred during the year (A) Estimate Cost to complete the project (B) Total Cost Incurred C=A+B % of Completion D=A/C*100 Total Contract Revenue E Gross margin F=E-C Gross Profit Reccognized G=F*D 1 $1,520.00 $3,150.00 $4,670.00 32.55% $5,200.00 $530.00 $172.51 2 $1,520.00 $3,150.00 $4,670.00 32.55% $5,200.00 $530.00 $172.51 3 $1,520.00 $3,150.00 $4,670.00 32.55% $5,200.00 $530.00 $172.51 4 $520.00 $3,640.00 $4,160.00 12.50% $5,200.00 $1,040.00 $130.00 5 $520.00 $3,640.00 $4,160.00 12.50% $5,200.00 $1,040.00 $130.00 6 $520.00 $4,800.00 $5,320.00 9.77% $5,200.00 -$120.00 -$11.73 Revenue Recognised in 2019 ( $ in 000) Situation Cost Incurred during the year (A) Estimate Cost to complete the project (B) Total Cost Incurred C=A+B % of Completion D=A/C*100 Total Contract Revenue E Gross margin F=E-C Gross Profit to be Reccognized G=F*D Gross Profit already recognised in2018 (H) Gross Profit /(Loss) recognised (I=G-H) 1 $2,190.00 $960.00 $3,150.00 69.52% $5,200.00 $2,050.00 $1,425.24 $172.51 $1,252.73 2 $960.00 $2,480.00 $3,440.00 27.91% $5,200.00 $1,760.00 $491.16 $172.51 $318.66 3 $2,190.00 $1,660.00 $3,850.00 56.88% $5,200.00 $1,350.00 $767.92 $172.51 $595.42 4 $3,020.00 $885.00 $3,905.00 77.34% $5,200.00 $1,295.00 $1,001.51 $130.00 $871.51 5 $3,020.00 $1,660.00 $4,680.00 64.53% $5,200.00 $520.00 $335.56 $130.00 $205.56 6 $3,020.00 $1,880.00 $4,900.00 61.63% $5,200.00 $300.00 $184.90 -$11.73 $196.63 Revenue Recognised in 2020 ($in000) Situation Cost Incurred during the year (A) Total Contract Revenue (B) Gross margin C=B-A Gross Profit to be Reccognized D=C Gross Profit already recognised in2018 (E) Gross Profit already recognised in2019 (F) Tptal Gross profit Recofnised till dateG=E+F Gross Profit /(Loss) recognised in2020 (H)=C-G 1 $960.00 $5,200.00 $4,240.00 $4,240.00 $172.51 $1,252.73 $1,425.24 $2,814.76 2 $2,480.00 $5,200.00 $2,720.00 $2,720.00 $172.51 $318.66 $491.16 $2,228.84 3 $1,760.00 $5,200.00 $3,440.00 $3,440.00 $172.51 $595.42 $767.92 $2,672.08 4 $1,040.00 $5,200.00 $4,160.00 $4,160.00 $130.00 $871.51 $1,001.51 $3,158.49 5 $1,440.00 $5,200.00 $3,760.00 $3,760.00 $130.00 $205.56 $335.56 $3,424.44 6 $2,000.00 $5,200.00 $3,200.00 $3,200.00 -$11.73 $196.63 $184.90 $3,015.10