Question

Concord, Inc. began work on a $6,466,000 contract in 2017 to construct an office building. During 2017, Concord, Inc. incurred costs of $1,547,340, billed its customers for $1,085,000, and collected $1,013,000. At December 31, 2017, the estimated additional costs to complete the project total $3,003,660. Prepare Concord’s 2017 journal entries using the percentage-of-completion method.

Answer 1

Date	Accounts	Debit	Credit
2017..	Construction in process	$ 1,547,340.00
	Cash		$ 1,547,340.00
	(To record cost of Construction incurred during year)
2017..	Accounts receivables	$ 1,085,000.00
	Billing on contract		$ 1,085,000.00
	(To record billing to customer)
2017..	Cash	$ 1,013,000.00
	Accounts Receivables		$ 1,013,000.00
	(To record receipt of cash)
Dec 31 2017..	Construction expenses	$ 1,547,340.00
	Construction in process	$     651,100.00
	Construction revenue		$        2,198,440
	(To record construction revenue)

Working

Working		2017
A	Contract Price	$        64,66,000
B	Cost Incurred to Date	$        15,47,340
C	Estimated cost yet to be incurred to complete the contract	$        30,03,660
D = B+C	Total Cost	$        45,51,000
E = (D/B) x 100	% of Complition	34%
F = A x E	Revenue to date	$        21,98,440
G	Revenue of Previous year	$                       -
H = F - G	Net Revenue this year	$        21,98,440
I	Cost to date	$        15,47,340
J	Cost to date of previous year	$                       -
K = I - J	Net Cost for the year	$        15,47,340
L = H - K	Gross Profits	$          6,51,100