In: Accounting
Question 8
Queens Construction Company commences construction of a harbour on 1 July 2020. It signs a fixed-price contract for total revenue of $400 million. The project is expected to be completed by the end of June 2023. The expected cost at the commencement of construction was $300 million. The expected costs to complete a construction project can change throughout the project. The following data relates to the project:
2021 |
2022 |
2023 |
|
($ M) |
($ M) |
($ M) |
|
Costs for the year |
90 |
110 |
120 |
Costs incurred to date |
90 |
200 |
320 |
Estimated costs to complete |
210 |
120 |
- |
Progress billings during the year |
100 |
120 |
180 |
Cash collected during the year |
90 |
130 |
180 |
The contract is completed as expected on 30 June 2023. Queens Construction Company uses the percentage-of-completion method to account for its construction contract.
REQUIRED
Provide the numbers for the journal entries below. Assume the stage of completion can be reliably determined. Round the percentage complete (%) to one decimal place (i.e, 0.0%) if necessary. Complete the six blanks below. (You don't need to provide the numbers for "?")
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Journal entry to record periodic income recognised for 2021, 2022, 2022