Question
In: Accounting
Beavis Construction Company was the low bidder on a construction project to build an office building...
Beavis Construction Company was the low bidder on a construction project to build an office building for $8,000,000. The project was begun in 2017 and completed in 2019. Cost and other data are presented below:
2017 2018 2019
Costs incurred during the year $ 1,500,000 $4,500,000 $1,550,000
Estimated costs to complete 4,500,000 1,500,000 -0-
Billings during the year 1,400,000 5,200,000 1,400,000
Cash collections during the year 1,000,000 4,000,000 3,000,000
Assume that Beavis recognizes revenue on this contract over time according to percentage of completion. Also assume that all construction costs are paid in Cash.
Required:
Compute the amount of revenue and gross profit recognized during 2017 and 2018.
Extra credit (9 points):
Prepare the 2018 journal entries to record:
a. Construction costs incurred during the year
b. Billings
c. Cash Collections
d. Revenue Recognition
Solutions
Expert Solution
| particulas | year | year | |||
| 2017 | 2018 | 2019+ | total | ||
| cost | 15,00,000.00 | 45,00,000.00 | 15,50,000.00 | ||
| estimate cost | 45,00,000.00 | 15,00,000.00 | 60,00,000.00 | ||
| billingds | 14,00,000.00 | 52,00,000.00 | 14,00,000.00 | ||
| cash collections | 10,00,000.00 | 40,00,000.00 | |||
| degree of compleion | cost incurred /estimated total cost to be incurred | ||||
| 25% | 80% | ||||
| contract price | 80,00,000.00 | ||||
| revenue | 20,00,000.00 | 44,00,000.00 | 16,00,000.00 | 80,00,000.00 | |
| cost | 15,00,000.00 | 45,00,000.00 | 15,50,000.00 | 75,50,000.00 | |
| profit | 5,00,000.00 | -1,00,000.00 | 50,000.00 | 4,50,000.00 | |
| 2018 entires | |||||
| parituclars | parituclars | debit | credit | ||
| costs | cip | 45,00,000.00 | |||
| to cash | 45,00,000.00 | ||||
| billings | accounts recievable | 52,00,000.00 | |||
| to billing | 52,00,000.00 | ||||
| cash collections | cash | 40,00,000.00 | |||
| to accounts reiceivalbe | 40,00,000.00 | ||||
| revenue recognition | cost | 45,00,000.00 | |||
| cip | 1,00,000.00 | ||||
| to revenue | 44,00,000.00 | ||||
| THANKS IN ADVANCE FOR GIVING ME POSITIVE RATINGS | ||||||
| MAY GOD BLESS YOU | ||||||
| STAY HOME STAY SAFE | ||||||
| HAVE A WONDERFUL DAY | ||||||
ekkarill92 answered 1 year agoRelated Solutions
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Billings during the year
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presented below:
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Estimated costs to complete
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0
Billings
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Required information
Assume that Beavis recognizes revenue on this contract over time...
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begun in 2012 and completed in 2013. Cost and other data are
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Assume that Beavis uses the percentage- of- completion method
for...
Beavis Construction Company was the low bidder on a construction project to build an earthen dam...
Beavis Construction Company was the low bidder on a construction
project to build an earthen dam for $1,800,000. The project was
begun in 2015 and completed in 2016. Cost and other data are
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0
Billings
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Cash collections during the year
300,000
1,500,000
Assume that Beavis recognizes revenue on this contract over time
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Beavis Construction Company was the low bidder on a construction project to build an earthen dam...
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1. Beavis Construction Company was the low bidder on a construction project to build an earthen...
1. Beavis Construction Company was the low bidder on a
construction project to build an earthen dam for $1,800,000. The
project was begun in 2017 and completed in 2018. Cost and other
data are presented below:
2017
2018
Costs incurred during the
year
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Estimated costs to
complete
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0
Billings during the
year
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Cash collections during the
year
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1,500,000
Assume that Beavis recognizes revenue on this contract over time
according to percentage of...
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