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In 2015 The Hi Tower Construction Company, started a 3 year project at a fixed contract...

In 2015 The Hi Tower Construction Company, started a 3 year project at a fixed contract price of $21,000,000. The estimated construction costs were $14,400,000. The project was completed on time during the third year. The following information is available for the three year period of the construction project.

2015    2016       2017

Costs Incurred to Date $6,420,000 $12,322,000 $15,135,000

Estimated Costs to Complete 8,150,000    2,368,000        --

Billings to Date 6,400,000   15,150,000   21,000,000

Collections to Date 5,150,000   15,110,000   20,900,000

Required

1. Compute the amount of gross profit to be recognized for

each of the three years using the percentage of completion.

2. Prepare all necessary journal entries for the 2015, 2016, and 2017 years using the percentage of completion method.

3. Compute gross profit to be recognized for the three years of 2015, 2016, and 2017 using the completed contract method.

4. For each of the three years of 2015, 2016, and 2017:

a. Prepare the Income Statement section to report the percentage of completion information.   

b. Prepare the Balance Sheet section to report the percentage of completion information.

Solutions

Expert Solution

for your referance formula sheet as under

ekkarill92 answered 1 year ago
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