Buildings Ltd

question 9

Essay

Buildings Ltd. is constructing a residential building in downtown Vancouver for a contract price of $15,000,000. Costs for this contract were initially estimated to be $12,000,000. The company uses the percentage of completion method of revenue recognition, using the cost-to-cost method of estimating the percentage complete. The following information is available:
Required:
a. Calculate the amount of gross profit to be recognized in each year. Show computations in good form.
b. Calculate the amount of revenue to be recognized in Year 2.
c. Prepare all the journal entries required in Year 2.
d. Prepare the journal entry required in Year 3 to acknowledge completion and acceptance of the project.

---

Definitions:

Dark Colors

Colors with low lightness or brightness, often associated with depth, sophistication, or somberness.

Light Colors

Refers to hues that have a high value and low saturation, often perceived as soft, soothing, or pastel.

Student Stress

The feeling of strain and pressure experienced by students due to academic demands, social challenges, or other factors.

Headaches

A common physical discomfort in the head, scalp, or neck regions, which can range from mild to severe and be caused by various factors.