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In: Accounting
A company began work in 2020 on a contract for $7,800. Other data are as follows:...
A company began work in 2020 on a contract for $7,800. Other data are as follows:
2020 2021
Costs incurred to date $3,000 $5,600
Estimated costs to complete 2,000 —
Billings to date 4,400 7,800
Collections to date 2,000 4,800
If the company uses the percentage-of-completion method, for the journal entry that records construction revenue, construction expense, and gross profit for 2020, how much will be recorded for Construction in Process?
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| A Company | |||
| Particulars | 2020 | 2021 | Note |
| Contract Price | 7,800 | 7,800 | A |
| Cost Incurred during the year | 3,000 | 2,600 | C |
| Cost Incurred to date | 3,000 | 5,600 | |
| Estimated cost to complete | 2,800 | D | |
| Estimated total cost | 5,800 | 5,600 | E=C+B |
| (Cost Incurred to date+ Estimated cost to complete ) | |||
| Percentage complete | 51.72% | 100.00% | F=B/E |
| (Cost Incurred to date/Estimated total cost) | |||
| Revenue to be recognized | 4,034 | 3,766 | G |
| Gross Profit/(Loss) | 1,034 | 1,166 | H=G-C |
| Calculation of revenue to be recognized |
| (Contract Price*Percentage complete)- revenue previously recognized |
| Year 2020: 51.72% completed. Revenue recognized = 51.72% x $ 7,800 = $ 4,034. |
| So Construction in Process recorded will be revenue to be recognized i.e. $ 4,034. |
ekkarill92 answered 1 year agoRelated Solutions
A company began work in 2020 on a contract for $7,800. Other data are as follows:...
A company began work in 2020 on a contract for $7,800. Other
data are as follows:
2020
2021
costs incurred to due
$3,000
5,600
estimated costs to complete
2,000
----------
Billings to date
3,100
7,800
collections to date
1,000
4,400
If the company uses the percentage-of-completion method, for the
journal entry that records construction revenue, construction
expense, and gross profit for 2020, how much will
be recorded for Construction in Process?
Classical Ltd. Began work in 2020 on a contract for $ 1,250,000. Other data are: ...
Classical Ltd. Began work in 2020 on a contract for $ 1,250,000.
Other data are:
2020
2021
Costs incurred
to
date......................................................................
$
540,000
$ 875,000
Estimated costs
to complete as of December 31.................
360,000 100,000
Billings to
date.....................................................................................
420,000 950,000
Collections to
date.............................................................................
300,000 700,000
Classical uses the percentage-of-completion method. Gross profit
recognized in 2020 was $210,000 (Revenue $750,000; expense
$540,000). The 2020 opening balance on LT Contract Asset/Liab is...
Classical Ltd. Began work in 2020 on a contract for $ 1,250,000. Other data are: ...
Classical Ltd. Began work in 2020 on a contract for $ 1,250,000.
Other data are:
2020
2021
Costs incurred
to
date......................................................................
$
540,000
$ 875,000
Estimated costs
to complete as of December 31.................
360,000 100,000
Billings to
date.....................................................................................
420,000 950,000
Collections to
date.............................................................................
300,000 700,000
Classical uses the percentage-of-completion method. Gross profit
recognized in 2020 was $210,000 (Revenue $750,000; expense
$540,000). The 2020 opening balance on LT Contract Asset/Liab is
$330,000...
Oriole, Inc. began work in 2018 on a contract for $21420000. Other data are as follows:...
Oriole, Inc. began work in 2018 on a contract for $21420000.
Other data are as follows:
2018 2019
Costs incurred to date $9180000 $14150000
Estimated costs to complete $6120000
0
Billings to date $7060000 $21300000
Collections to date $5060000 $18150000
If Oriole uses the percentage-of-completion method, the gross
profit to be recognized in 2018 is
Windsor Construction Company began work on a $404,000 construction contract in 2020. During 2020, Windsor incurred...
Windsor Construction Company began work on a $404,000
construction contract in 2020. During 2020, Windsor incurred costs
of $273,000, billed its customer for $232,000, and collected
$182,000. At December 31, 2020, the estimated additional costs to
complete the project total $163,660.
Prepare Windsor’s journal entry to record profit or loss, if any,
using (a) the percentage-of-completion method and (b) the
completed-contract method. (Credit account titles are
automatically indented when amount is entered. Do not indent
manually. If no entry is...
Tamarisk Construction Company began work on a $406,500 construction contract in 2020. During 2020, Tamarisk incurred...
Tamarisk Construction Company began work on a $406,500 construction
contract in 2020. During 2020, Tamarisk incurred costs of $292,500,
billed its customer for $213,500, and collected $177,000. At
December 31, 2020, the estimated additional costs to complete the
project total $161,340.
Prepare Tamarisk’s journal entry to record profit or loss, if any,
using (a) the percentage-of-completion method and (b) the
completed-contract method. (Credit account titles are
automatically indented when amount is entered. Do not indent
manually. If no entry is...
Cullumber Construction Company began work on a $400,000 construction contract in 2020. During 2020, Cullumber incurred...
Cullumber Construction Company began work on a $400,000
construction contract in 2020. During 2020, Cullumber incurred
costs of $250,000, billed its customer for $200,000, and collected
$170,000. At December 31, 2020, the estimated additional costs to
complete the project total $178,890.
Prepare Cullumber’s journal entry to record profit or loss, if any,
using (a) the percentage-of-completion method and (b) the
completed-contract method. (Credit account titles are
automatically indented when amount is entered. Do not indent
manually. If no entry is...
Windsor Construction Company began work on a $404,000 construction contract in 2020. During 2020, Windsor incurred...
Windsor Construction Company began work on a $404,000
construction contract in 2020. During 2020, Windsor incurred costs
of $273,000, billed its customer for $232,000, and collected
$182,000. At December 31, 2020, the estimated additional costs to
complete the project total $163,660.
Prepare Windsor’s journal entry to record profit or loss, if any,
using (a) the percentage-of-completion method and (b) the
completed-contract method. (Credit account titles are
automatically indented when amount is entered. Do not indent
manually. If no entry is...
Splish, Inc. began work on a $6,312,000 contract in 2020 to construct an office building. During...
Splish, Inc. began work on a $6,312,000 contract in 2020 to
construct an office building. During 2020, Splish, Inc. incurred
costs of $1,589,940, billed its customers for $1,156,000, and
collected $894,000. At December 31, 2020, the estimated additional
costs to complete the project total $3,228,060.
Prepare Splish’s 2020 journal entries using the
percentage-of-completion method. (Credit account titles
are automatically indented when amount is entered. Do not indent
manually. For costs incurred use account Materials, Cash, Payables.
If no entry is...
Crane, Inc. began work on a $7,016,000 contract in 2020 to construct an office building. During...
Crane, Inc. began work on a $7,016,000 contract in 2020 to
construct an office building. During 2020, Crane, Inc. incurred
costs of $1,798,560, billed its customers for $1,125,000, and
collected $910,000. At December 31, 2020, the estimated additional
costs to complete the project total $3,197,440.
Prepare Crane’s 2020 journal entries using the
percentage-of-completion method. (Credit account titles
are automatically indented when amount is entered. Do not indent
manually. For costs incurred use account Materials, Cash, Payables.
If no entry is...
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