Brady Construction Company contracted to build an apartment complex for a price

Question

Brady Construction Company contracted to build an apartment complex for a price of $5,600,000. 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. Estimated Costs to Complete Costs Incurred During (As of the End of the Year Year) Situation 2018 2019 2020 2018 2019 2020 11,560 2,310 080 3,390 1,080 2 1,560 1,080 2,640 3,390 2,640 3 1,560 2,310 2,080 3,390 1,980- 4 560 3,060 20 3,920 905 5 560 3,060 1,720 3,920 1,980- 6 560 3,060 2,400 5,200 2,240 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

Statement Showing Gross Profit/Loss Recognized ( $ in 000) Revenue Recognized Over time Revenue Recognized Upon Completion Situation 2018 2019 2020 2018 2019 2020 1                205              303                142                650 2                205              (45)                160                320 3                205            (370)             (185)          (165)             (350) 4                140              720                   -                  860 5                140            (140)                260                260 6              (160)            (145)             (259)                  (160)          (145)             (564) Revenue Recognized in 2018 ($in 000) Situation Cost Incurred as on 2018
( A) Estimated Cost TO Complete (B) Total Cost to be incurred (C= A+B) % of completion (D=A/C*100) Total Contract Revenue ( E) Gross Margin
( F=E-C) Gross Profit Recognized (G=F*D) 1            1,560           3,390            4,950                       32         5,600                650                   205 2            1,560           3,390            4,950                       32         5,600                650                   205 3            1,560           3,390            4,950                       32         5,600                650                   205 4                560           3,920            4,480                       13         5,600            1,120                   140 5                560           3,920            4,480                       13         5,600            1,120                   140 6                560           5,200            5,760                       10         5,600             (160)                 (160) Revenue Recognized in 2019 ($in 000) Situation Cost Incurred as on 2019
( A) Estimated Cost TO Complete (B) Total Cost to be incurred (C= A+B) % of completion (D=A/C*100) Total Contract Revenue ( E) Gross Margin
( F=E-C) Gross Profit Recognized (G=F*D) Gross Profit Already Recognized in 2018 (H) Gross Profit recognized for 2019 (I=G-H) 1            3,870           1,080            4,950                       78         5,600                650                   508                   205                303 2            2,640           2,640            5,280                       50         5,600                320                   160                   205                (45) 3            3,870           1,980            5,850                       66         5,600             (250)                 (165)                   205              (370) 4            3,620              905            4,525                       80         5,600            1,075                   860                   140                720 5            3,620           1,980            5,600                       65         5,600                   -                        -                     140              (140) 6            3,620           2,240            5,860                       62         5,600             (260)                 (161)                (160)                  (1) Revenue Recognized in 2020 ( $ in 000) Situation Cost Incurred as on 2020
( A) Estimated Cost TO Complete (B) Total Cost to be incurred (C= A+B) % of completion (D=A/C*100) Total Contract Revenue ( E) Gross Margin
( F=E-C) Gross Profit Recognized (G=F*D) Gross Profit Already Recognized till 2019 (H) Gross Profit recognized for 2019 (I=G-H) 1            4,950            4,950                     100         5,600                650                   650                   508                142 2            5,280            5,280                     100         5,600                320                   320                   160                160 3            5,950            5,950                     100         5,600             (350)                 (350)                (165)              (185) 4            4,740            4,740                     100         5,600                860                   860                   860                   -   5            5,340            5,340                     100         5,600                260                   260                      -                  260 6            6,020            6,020                     100         5,600             (420)                 (420)                (161)              (259)

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