Magnum Construction Contracted to Construct a Factory Building for $545,000Required: Record the Preceding Transactions in Magnum's Books Under Completed-Contract

The Answer of Magnum Construction Contracted to Construct a Factory Building for $545,000Required: Record the Preceding Transactions in Magnum's Books Under Completed-Contract

Magnum Construction Contracted to Construct a Factory Building for $545,000Required: Record the Preceding Transactions in Magnum's Books Under Completed-Contract

The Answer of Magnum Construction Contracted to Construct a Factory Building for $545,000Required: Record the Preceding Transactions in Magnum's Books Under Completed-Contract

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Magnum Construction Contracted to Construct a Factory Building for $545,000

question 8

Essay

Magnum Construction contracted to construct a factory building for $545,000. The company started during 2012 and was completed in 2013. Information relating to the contract is as follows:
$\begin{array}{|l|l|l|}\hline & 2012 & 2013 \\\hline \text { Costs incurred during the year } & \$ 310,000 & \$ 170,000 \\\hline \text { Estimated additional cost to complete } & 165,000 & - \\\hline \text { Billings during the year } & 280,000 & 285,000 \\\hline \text { Cash collections during the year } & 260,000 & 305,000 \\\hline\end{array}$
Required:
Record the preceding transactions in Magnum's books under completed-contract and the percentage of completion methods. Determine amounts that will be reported on the balance sheet at the end of 2012.
$\begin{array}{llcc} \text { Conpleted-Contract Method } & \\\underline{ \text { Year 2012 } }&\\ \text {DR Construction in progress } &\$310,000\\ \text {CR Cash, payables, materials, etc. } &&\$310,000\\ \text {DR Accounts receivable } &\$280,000\\ \text { CR Billings on contract } &\$280,000&\\ \text { DR Cash } &\$260,000\\ \text { CR Accountsreceivable } &&\$260,000\\ \text { Since the project is incomplete, no revenue is recogrized for the } &\\ \text {year } &\\ \text { 2012} &\\\end{array}$
$Magnum Construction contracted to construct a factory building for $545,000. The company started during 2012 and was completed in 2013. Information relating to the contract is as follows: \begin{array}{|l|l|l|} \hline & 2012 & 2013 \\ \hline \text { Costs incurred during the year } & \$ 310,000 & \$ 170,000 \\ \hline \text { Estimated additional cost to complete } & 165,000 & - \\ \hline \text { Billings during the year } & 280,000 & 285,000 \\ \hline \text { Cash collections during the year } & 260,000 & 305,000 \\ \hline \end{array} Required: Record the preceding transactions in Magnum's books under completed-contract and the percentage of completion methods. Determine amounts that will be reported on the balance sheet at the end of 2012. \begin{array}{llcc} \text { Conpleted-Contract Method } & \\ \underline{ \text { Year 2012 } }&\\ \text {DR Construction in progress } &\$310,000\\ \text {CR Cash, payables, materials, etc. } &&\$310,000\\ \text {DR Accounts receivable } &\$280,000\\ \text { CR Billings on contract } &\$280,000&\\ \text { DR Cash } &\$260,000\\ \text { CR Accountsreceivable } &&\$260,000\\ \text { Since the project is incomplete, no revenue is recogrized for the } &\\ \text {year } &\\ \text { 2012} &\\ \end{array} \begin{array}{llcc} \text { Percentige-of-Conpletion Method} & \\ \underline{ \text { Year 2012}}\\ \text { DR Construction in progress } &\$310,000\\ \text {CR Cash, payables, materials, etc. } &&\$310,000\\ \text { DR Accounts receivable } &\$280,000\\ \text { CR Billings on contract } &&\$280,000\\ \text {DR Cash } &\$260,000\\ \text { CR Accountsreceivable} &&\$260,000\\ \end{array} \begin{array}{llcc} \text {DR Construction in progress' } &\$45,684 \\ \text { CR Income onlong-term } &\\ \text { construction contracts} &&\$45,684\\ \underline{\text {Alteminte entry:}}\\ \text { DR Construction in progress} &\$45,68\\ \text { DR Construction expense } &4\\ \text { CR Construction revenue* } &310,000&\$355,684\\ \text { Contract price } &&\$545,000\\ \text { - Actual coststo date } &(\$310,000)\\ \text { - Estimated costs to complete } &\underline{(165,000)}\\ \text {Total estimated costs of project } &&\underline{(475,00)}\\ \text { Estimated total grossmargin } &&\$70,000\\ \end{array}$ $\begin{array}{llcc} \text { Percentige-of-Conpletion Method} & \\\underline{ \text { Year 2012}}\\ \text { DR Construction in progress } &\$310,000\\ \text {CR Cash, payables, materials, etc. } &&\$310,000\\ \text { DR Accounts receivable } &\$280,000\\ \text { CR Billings on contract } &&\$280,000\\ \text {DR Cash } &\$260,000\\ \text { CR Accountsreceivable} &&\$260,000\\\end{array}$
$\begin{array}{llcc} \text {DR Construction in progress' } &\$45,684 \\ \text { CR Income onlong-term } &\\ \text { construction contracts} &&\$45,684\\\underline{\text {Alteminte entry:}}\\ \text { DR Construction in progress} &\$45,68\\ \text { DR Construction expense } &4\\ \text { CR Construction revenue* } &310,000&\$355,684\\ \text {"Contract price } &&\$545,000\\ \text { - Actual coststo date } &(\$310,000)\\ \text { - Estimated costs to complete } &\underline{(165,000)}\\ \text {Total estimated costs of project } &&\underline{(475,00)}\\ \text { Estimated total grossmargin } &&\$70,000\\\end{array}$
$Magnum Construction contracted to construct a factory building for $545,000. The company started during 2012 and was completed in 2013. Information relating to the contract is as follows: \begin{array}{|l|l|l|} \hline & 2012 & 2013 \\ \hline \text { Costs incurred during the year } & \$ 310,000 & \$ 170,000 \\ \hline \text { Estimated additional cost to complete } & 165,000 & - \\ \hline \text { Billings during the year } & 280,000 & 285,000 \\ \hline \text { Cash collections during the year } & 260,000 & 305,000 \\ \hline \end{array} Required: Record the preceding transactions in Magnum's books under completed-contract and the percentage of completion methods. Determine amounts that will be reported on the balance sheet at the end of 2012. \begin{array}{llcc} \text { Conpleted-Contract Method } & \\ \underline{ \text { Year 2012 } }&\\ \text {DR Construction in progress } &\$310,000\\ \text {CR Cash, payables, materials, etc. } &&\$310,000\\ \text {DR Accounts receivable } &\$280,000\\ \text { CR Billings on contract } &\$280,000&\\ \text { DR Cash } &\$260,000\\ \text { CR Accountsreceivable } &&\$260,000\\ \text { Since the project is incomplete, no revenue is recogrized for the } &\\ \text {year } &\\ \text { 2012} &\\ \end{array} \begin{array}{llcc} \text { Percentige-of-Conpletion Method} & \\ \underline{ \text { Year 2012}}\\ \text { DR Construction in progress } &\$310,000\\ \text {CR Cash, payables, materials, etc. } &&\$310,000\\ \text { DR Accounts receivable } &\$280,000\\ \text { CR Billings on contract } &&\$280,000\\ \text {DR Cash } &\$260,000\\ \text { CR Accountsreceivable} &&\$260,000\\ \end{array} \begin{array}{llcc} \text {DR Construction in progress' } &\$45,684 \\ \text { CR Income onlong-term } &\\ \text { construction contracts} &&\$45,684\\ \underline{\text {Alteminte entry:}}\\ \text { DR Construction in progress} &\$45,68\\ \text { DR Construction expense } &4\\ \text { CR Construction revenue* } &310,000&\$355,684\\ \text { Contract price } &&\$545,000\\ \text { - Actual coststo date } &(\$310,000)\\ \text { - Estimated costs to complete } &\underline{(165,000)}\\ \text {Total estimated costs of project } &&\underline{(475,00)}\\ \text { Estimated total grossmargin } &&\$70,000\\ \end{array}$

Definitions:

Leadership Ethics

The moral guidelines and principles that govern the behavior and decision-making of leaders.

Ethical Leadership Theory

A concept that emphasizes the importance of leaders acting in an ethical manner and promoting ethical practices among their followers.

Utilitarianism

is an ethical theory that advocates for actions that maximize happiness or benefit for the largest number of people.

Ethical Theory

Philosophical reasoning that guides individuals in determining what is morally right and wrong in human conduct.