Explore BrainMass

Explore BrainMass

    KP Building Inc. Cash and Costs

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    In 2011, KP Building Inc. began work on a four-year construction project (called â??Cincy Oneâ?). The contract price is $300 million. KP uses the percentage-of-completion method of accounting. At the end of 2011, the following financial statement information indicates the results to date for Cincy One:

    INCOME STATEMENT
    Gross Profit (before-taxes) recognized in 2011 $22 million

    BALANCE SHEET
    Accounts Receivable from construction billings $10 million
    Construction in progress $66 million
    Less: Billings on construction ($75 million)
    Net billings in excess of construction in progress $9 million

    Required: Compute the following, placing your answer in the spaces provided and
    showing supporting computations:

    Items to compute:

    Cash collected by KP on Cincy One during 2011
    Actual costs incurred by KP on Cincy One during 2011
    At 12/31/2011, the estimated remaining costs to complete Cincy One
    The percentage of Cincy One that was completed during 2011

    © BrainMass Inc. brainmass.com June 4, 2020, 1:42 am ad1c9bdddf
    https://brainmass.com/business/accounting/kp-building-inc-cash-costs-414951

    Solution Preview

    Please find the solution attached

    In 2011, KP Building Inc. began work on a four-year construction project (called “Cincy One”). The contract price is $300 million. KP uses the percentage-of-completion method of accounting. At the end of 2011, the following financial statement information indicates the results ...

    Solution Summary

    The expert examines KP Building Inc for cash and costs.

    $2.19

    ADVERTISEMENT