Question

Excel Assignment (Percentage-of-completion)
Required:
1- Using the data provided below you are to input formulas in the area designated below to calculate: % complete, revenue to be recognized in each year, and gross profit to be recognized in each year. (10 points)
Hint: I suggest you use formulas with an IF function regarding the gross profit section of your speadsheet because your spreadsheet should be able to calculate correct answers whether a contract generates a profit or loss.
2- Using the data given and the solutions your spreadsheet generated, prepare all journal entries for 2017. Whevenver possible, the amounts for your journal entries should be formulas that reference the appropriate cells in the calcuations below. (10 points)
				3-Once you have completed the spreadsheet save your file with your last name(s) and first name(s) and upload it under Assignments by the assignment due date.
Data:
Contract price	1,200,000
	2016	2017	2018
Costs incurred to date**	$280,000	$600,000	$785,000
Estimated costs yet to be incurred	520,000	200,000	0
Customer billings to date**	250,000	500,000	1,200,000
Collections of billings to date**	120,000	320,000	1,040,000
**Hint: You have to figure out the actual cost, billings, and collections for each respective year. The information presented is "to date" not "Costs expended this year" as in the handouts and some of your assigned exercises/problems.
Use the format provided below to input formulas for each respective year.
	2016	2017	2018
Costs expended to date
Estimated total costs
% complete
Contract price
% complete
Revenue recognized to date
Revenue recognized prior
Revenue recognized current
Estimated total gross profit
% complete
Gross profit recognized to date
Gross profit recognized prior
Gross profit recognized current

Answer 1

1.

	2016	2017	2018
Costs expended to date	280000	600000	785000
Estimated total costs	800000	800000	785000
% complete	35%	75%	100%
Contract Price	2000000	2000000	2000000
Percentage Complete	35%	75%	100%
Revenue recognised to date	700000	1500000	2000000
Revenue recognized prior	0	700000	1500000
Revenue recognized current	700000	800000	500000
Estimated Total gross profit	420000	1215000	1215000
Gross profit recognized to date	420000	900000	1215000
Gross profit recognized prior	0	420000	900000
Gross Profit Recognised current	420000	480000	315000

2.

Journal entries for 2017
1. For costs incurred
Accounts Title	Debit	Credit
Contract -in-progress	320000
Accounts Payable		320000
2. For revenue Recognition
Accounts Title	Debit	Credit
Contract Expenses (Current year expenses)	320000
Contract-in-progress (Curent year gross profit)	4800000
Contract Revenue (Current year revenue)		800000
3. For billings done during the year
Accounts Title	Debit	Credit
Accounts Receivable	250000
Contract Billings		250000
3. For cash collections during the year
Accounts Title	Debit	Credit
Cash	200000
Accounts Receivable		200000