garfield construction w blanks n ifrs sol

7/28/2019 Garfield Construction w Blanks n IFRS Sol

1/13

Acct 414 6/13/2013 Prof. Teresa Gordon

Garfield Construction Inc. - Construction Accounting

Total contract revenue: 10,000,000

2011 2012 2013 TotalsConstruction costs incurredduring year 2,000,000 3,100,000 3,300,000 8,400,000Progress billings for yr 1,500,000 4,100,000 4,400,000 10,000,000Collections during year 1,000,000 4,200,000 4,800,000 10,000,000Est costs to complete 6,000,000 3,400,000 0

2011 2012 2013Cost incurred to-date

Estimated total cost

Percentage of completion

Construction revenue to-date

Construction revenue for year

Construction cost for year

Gross profit for year

Gross profit recognized to-date

Garfield Construction Inc. (GCI) has contracted to build hydroelectric plant onthe Palouse River. The project will take three years to complete. The contractprice is $10,000,000. CCC can bill the State of Washington during constructionon a formula basis. Both parties are expected to fulfill their obligations underthe contract.


2/13



JOURNAL ENTRIES

(US GAAP or IFRS) DR CR DR CR DR CR DR

Construction in Progress

Accts Pay, Cash, etc.

Accounts Receivable

Partial Billings

Cash

Accounts Receivable

T-accounts Construction in progress Partial billings Accounts

2011 2012 2013 20

151652101.xls.ms_office - 2 - JEs-% blank


3/13


CR

eceivable

14

151652101.xls.ms_office - 3 - JEs-% blank


4/13



JOURNAL ENTRIES

Completed contract method (USGAAP only) DR CR DR CR DR CR DR CR



Accounts Receivable

Partial Billings

Cash

Accounts Receivable

T-accounts Construction in progress Partial billings Accounts Receivable

2011 2012 2013 2014

151652101.xls.ms_office - 4 - JEs-CC-blank


5/13



JOURNAL ENTRIES

Zero Profit Method (IFRS only) DR CR DR CR DR CR DR CR



Accounts Receivable

Partial Billings

Cash

Accounts Receivable

T-accounts

2011 2012 2013 2014

Construction in progress Partial billings Accounts Receivable

151652101.xls.ms_office - 5 - JEs-zero profit (blank)


6/13


Garfield Construction Inc. - Construction AccountingTotal contract revenue: 10,000,000

2011 2012 2013Construction costsincurred during the year 2,000,000 3,100,000 3,300,000

Progress billings during yr 1,500,000 4,100,000 4,400,000Collections during year 1,000,000 4,200,000 4,800,000Estimated costs to complete 6,000,000 3,400,000 0

Percentage of completion 25.00% 60.00% 100.00%PARTIAL SOLUTION

Yr end balancesCIP-% of completion 2,500,000 6,000,000 10,000,000CIP-completed contract & zero

profit 2,000,000 5,100,000 8,400,000Progress Billings 1,500,000 5,600,000 10,000,000A/R 500,000 400,000 0

SOLUTION - PERCENTAGE OF COMPLETION METHODCost incurred to-date 2,000,000 5,100,000 8,400,000ESTIMATED TOTAL COST 8,000,000 8,500,000 8,400,000% of completion 25.00% 60.00% 100.00%

Constr Rev to-date 2,500,000 6,000,000 10,000,000

Construction Revenue for yr 2,500,000 3,500,000 4,000,000Construction Cost 2,000,000 3,100,000 3,300,000Gross Profit Construction 500,000 400,000 700,000

PROJECTED TOTAL PROFIT 2,000,000 1,500,000 1,600,000G.P. RECOGNIZED TO-DATE 500,000 900,000 1,600,000


7/13


BALANCE SHEET PRESENTATI 2011 2012 2013

Percentage of Completion:CURRENT ASSETSConstr Costs in Excessof related billings 1,000,000 400,000

CURRENT LIABILITIESConstr Billings in excessof related costs

Completed Contract

CURRENT ASSETSConstr Costs in Excessof related billings 500,000

CURRENT LIABILITIES

Constr Billings in excessof related costs 500,000


8/13


totals

8,400,00010,000,00010,000,000

OK

OK

10,000,0008,400,0001,600,000

OK


9/13



10/13


Garfield Construction Inc. - Construction Accounting s o l u t i o nJOURNAL ENTRIES

PERCENTAGE OF COMPLETION METHOD DR CR DR CR DR CR DR

Construction in Progress 2,000,000 3,100,000 3,300,000 -

Accts Pay, Cash, etc. 2,000,000 3,100,000 3,300,000

Accounts Receivable 1,500,000 4,100,000 4,400,000 -

Partial Billings 1,500,000 4,100,000 4,400,000

Cash 1,000,000 4,200,000 4,800,000 -

Accounts Receivable 1,000,000 4,200,000 4,800,000

Construction Costs 2,000,000 3,100,000 3,300,000 -

Construction in Progress 500,000 400,000 700,000 -

Construction Revenue 2,500,000 3,500,000 4,000,000

Closing Entry

Partial Billings 10,000,000

Construction in Progress 10,000,000

T-accounts

2,000,000 1,500,000 1,500,000

500,000 -Ending balance 1999 2,500,000 1,500,000 500,000

3,100,000 4,100,000 4,100,000400,000 -

Ending balance 2000 6,000,000 5,600,000 400,0003,300,000 4,400,000 4,400,000

700,000Ending balance 2001 10,000,000 10,000,000 -

- - --

Ending balance 2002 10,000,000 10,000,000 -- - -- -

Pre-closing balance, 2003 10,000,000 10,000,000 -

Construction in progress Partial billings Accounts

2011 2012 2013 20

151652101.xls.ms_office - 10 - JEs-% (sol)


11/13


CR

-

-

-

-

1,000,000

4,200,000

4,800,000

-

-

eceivable

14

151652101.xls.ms_office - 11 - JEs-% (sol)


12/13



COMPLETED CONTRACT METHOD DR CR DR CR DR CR DR CR

Construction in Progress 2,000,000 - 3,100,000 - 3,300,000 - - -

Accts Pay, Cash, etc. - 2,000,000 - 3,100,000 - 3,300,000 - -- - - - - - - -

Accounts Receivable 1,500,000 - 4,100,000 - 4,400,000 - - -

Partial Billings - 1,500,000 - 4,100,000 - 4,400,000 - -

- - - - - - - -

Cash 1,000,000 - 4,200,000 - 4,800,000 - - -

Accounts Receivable - 1,000,000 - 4,200,000 - 4,800,000 - -

Estimated loss on construction contract - - - -

Construction in progress - - - -

Closing Entry

Partial Billings 10,000,000

Construction revenue 10,000,000

Construction costs 8,400,000

Construction in progress 8,400,000

T-accounts

2,000,000 1,500,000 1,500,0000 0 1,000,000

Ending balance 1999 2,000,000 1,500,000 500,0003,100,000 4,100,000 4,100,000

0 0 4,200,000Ending balance 2000 5,100,000 5,600,000 400,000

3,300,000 4,400,000 4,400,0000 0 4,800,000

Ending balance 2001 8,400,000 10,000,000 0

0 0 00 0 0Ending balance 2002 8,400,000 10,000,000 0

0 0 00 0 0

Pre-closing balance, 2003 8,400,000 10,000,000 0


2011 2012 2013 2014

151652101.xls.ms_office - 12 - JEs-CC (sol)


13/13



COMPLETED CONTRACT METHOD DR CR DR CR DR CR DR CR

Construction in Progress 2,000,000 - 3,100,000 - 3,300,000 - - -

Accts Pay, Cash, etc. - 2,000,000 - 3,100,000 - 3,300,000 - -- - - - - - - -

Accounts Receivable 1,500,000 - 4,100,000 - 4,400,000 - - -

Partial Billings - 1,500,000 - 4,100,000 - 4,400,000 - -

- - - - - - - -

Cash 1,000,000 - 4,200,000 - 4,800,000 - - -

Accounts Receivable - 1,000,000 - 4,200,000 - 4,800,000 - -

Construction costs 2,000,000 3,100,000 3,300,000 -

Construction revenue 2,000,000 3,100,000 3,300,000 -

Closing entry

Construction revenue (gross profit) 1,600,000

Contr in progress 8,400,000

Partial billings 10,000,000

T-accounts

2,000,000 1,500,000 1,500,0000 1,000,000

Ending balance 2011 2,000,000 1,500,000 500,0003,100,000 4,100,000 4,100,000

0 4,200,000Ending balance 2012 5,100,000 5,600,000 400,000

3,300,000 4,400,000 4,400,0000 4,800,000

Ending balance 2013 8,400,000 10,000,000 0

0 0 00 0 0Ending balance 2014 8,400,000 10,000,000 0

0 0 00 0 0

Pre-closing balance, 2015 8,400,000 10,000,000 0

2011 2012 2013 2014


151652101.xls.ms_office - 13 - JEs-zero profit (sol)

garfield construction w blanks n ifrs sol

Documents