Income Statement

Sale of land
Normal method

2013 Cash $ 150,000.00

Installment receivable $ 2,850,000.00
cogs $ 1,200,000.00
Inventory
Revenue

2014 Cash
Installment receivable $ 150,000.00

Costs incurred Billings Collections

2012 $ 300,000.00 $ 275,000.00
2013
2014
Totals

Handout: powerpoint 2012

Construction in progress $ 300,000.00
Cash $ 300,000.00

a/r $ 275,000.00
progress billings (contra) $ 275,000.00

Cash $ 225,000.00
a/r $ 225,000.00

cost of construction $ 300,000.00

construction in progress $ 150,000.00
Revenue $ 450,000.00

a/r $ 50,000.00
Construction in progress $ 450,000.00
progress billings (contra) $ (275,000.00)

Cost of construction $ 500,000.00

cconstruction in progress $ 215,909.00
revenue $ 715,909.00
 $ 1,090,909.00

Alpine Example

6-Nov-13
Cash $ 450.00
Unearned revenue $ 450.00

31-Dec-13
Unearned revenue $ 90.00
Revenue $ 90.00

BE 5-7
Construction in progress $ 6,000,000.00
Cash $ 6,000,000.00

a/r $ 7,000,000.00
progress billings $ 7,000,000.00

Cash $ 5,000,000.00
a/r $ 5,000,000.00

cost of construction $ 6,000,000.00

construction in progress $ 2,000,000.00
Revenue $ 8,000,000.00

P 5-5
cost of construction/cost of construction
2013
Construction in progress $ 2,400,000.00
Cash $ 2,400,000.00

a/r $ 2,000,000.00
progress billings $ 2,000,000.00

Cash $ 1,800,000.00
a/r $ 1,800,000.00

Cost of construction $ 2,400,000.00

construction in progress $ 600,000.00
Revenue $ 3,000,000.00

Balance Sheet
Cash -
a/r
construction in progress
progress in billings
 Income Statement

$ 1,200,000.00
$ 3,000,000.00

$ 150,000.00

Percentage finished = cost incurred / total costs + new estimate

2013
Construction in progress $ 500,000.00
Cash

a/r $ 475,000.00
progress billings

Cash $ 450,000.00
a/r

Cost of construction $ 500,000.00

Construction in progress $ 250,000.00
Revenue

a/r $ 75,000.00
Construction in progress $ 1,200,000.00
progress billings $ (750,000.00)

Cost of construction $ 500,000.00

construction in progress $ 1,000,000.00
Revenue
 2013
E 5-11
Construction in progress $ 300,000.00
Cash

a/r $ 380,000.00
progress billings

Cash $ 250,000.00
a/r

Cost of construction $ 300,000.00

construction in progress $ 100,000.00
Revenue

Balance Sheet
Cash $ (50,000.00)
a/r $ 130,000.00
construction in progress $ 20,000.00
progress in billings $ (380,000.00)

2400000/8000000 which equals 30%

of construction/cost of construction+new estimate
2014
Construction in progress
Cash

a/r
progress billings

Cash
a/r

Cost of construction
construction in progress
Revenue

Balance Sheet
Cash
a/r
construction in progress
progress in billings
dererred method: percentage

Installment receivable 3000000

Inventory $ 1,200,000.00
Deferred gross profit $ 1,800,000.00

Cash $ 150,000.00
installment receivables $ 150,000.00

Deferred gross profit $ 90,000.00

recogized gross profit $ 90,000.00

2014
Construction in progress
$ 500,000.00 Cash

a/r
$ 475,000.00 progress billings

Cash
$ 450,000.00 a/r

Cost of construction
Construction in progress
$ 750,000.00 Revenue

a/r
Construction in progress
progress billings

$ 1,500,000.00
 2014

CIP
$ 300,000.00 Cash

a/r
$ 380,000.00 progres billings

Cash
$ 250,000.00 a/r

cost of construction
CIP
$ 400,000.00 Revenue

numerator equals the total cost incurred to date---includes previous years

$ 3,600,000.00
$ 3,600,000.00

$ 4,000,000.00
$ 4,000,000.00

$ 3,600,000.00
$ 3,600,000.00

$ 3,600,000.00
$ 800,000.00
$ 4,500,000.00
$ 200,000.00
$ 200,000.00

$ 750,000.00
$ 750,000.00

$ 825,000.00
$ 825,000.00

$ 200,000.00
$ 100,000.00
$ 300,000.00

$ -
$ 1,500,000.00
$ (1,500,000.00)
$ 1,575,000.00
$ 1,575,000.00

$ 1,620,000.00
$ 1,620,000.00

$ 1,750,000.00
$ 1,750,000.00

$ 1,575,000.00
$ 25,000.00
$ 1,600,000.00

2015
Construction in progress $ 2,200,000.00
Cash $ 2,200,000.00

a/r $ 8,000,000.00
progress billings $ 8,000,000.00

Cash $ 9,600,000.00
a/r $ 9,600,000.00

Cost of construction $ 2,200,000.00

construction in progress $ 300,000.00
Revenue $ 2,500,000.00

Balance Sheet
Cash
a/r
construction in progress
progress in billings