Splish Construction Company began work on a $402,000
construction contract in 2020. During 2020, Splish incurred costs
of $252,000, billed its customer for $210,500, and collected
$177,000. At December 31, 2020, the estimated additional costs to
complete the project total $162,405.
Prepare Splish’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 required, select "No entry" for the
account titles and enter 0 for the amounts. Round answers to 0
decimal places, e.g. 5,275.)
No. |
Account Titles and Explanation |
Debit |
Credit |
---|---|---|---|
(a) |
enter an account title to record the transaction using the percentage-of-completion method |
enter a debit amount |
enter a credit amount |
enter an account title to record the transaction using the percentage-of-completion method |
enter a debit amount |
enter a credit amount |
|
enter an account title to record the transaction using the percentage-of-completion method |
enter a debit amount |
enter a credit amount |
Contract price | 402000 | ||
Cost incurred in 2020 | 252000 | ||
Estimated additional cost to complete | 162405 | ||
Total cost of contract | 414405 | ||
Estimated loss on the contract | -12405 | ||
Cost incurred in 2020 (a) | 252000 | ||
Total cost of contract (b) | 414405 | ||
Percentage completed in 2020 (a/b) | 60.81% | ||
Contract price (a) | 402000 | ||
Percentage completed in 2020 (b) | 60.81% | ||
Revenue to be recognized in 2020 (a x b) | 244456 | ||
Prepare the required journal entries as follows: | |||
No. | Account Titles and Explanation | Debit | Credit |
(a) | Construction expense (balancing figure) | 256861 | |
Construction in process | 12405 | ||
Construction revenue | 244456 | ||
(b) | Loss from contract | 12405 | |
Construction in process | 12405 |
Splish Construction Company began work on a $402,000 construction contract in 2020. During 2020, Splish incurred...
Splish Construction Company began work on a $418,500 construction contract in 2020. During 2020, Splish incurred costs of $285,500, billed its customer for $233,000, and collected $172,000. At December 31, 2020, the estimated additional costs to complete the project total $155,765. Prepare Splish’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 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...
Indigo Construction Company began work on a $420,500 construction contract in 2020. During 2020, Indigo incurred costs of $299,000, billed its customer for $202,000, and collected $177,000. At December 31, 2020, the estimated additional costs to complete the project total $151,030. Prepare Indigo’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...
Cheyenne Construction Company began work on a $424,000
construction contract in 2020. During 2020, Cheyenne incurred costs
of $279,500, billed its customer for $204,500, and collected
$170,500. At December 31, 2020, the estimated additional costs to
complete the project total $150,500.
Prepare Cheyenne’s journal entry to record profit or loss, if any,
using (a) the percentage-of-completion method and (b) the
completed-contract method.
Cheyenne Construction Company began work on a $424.000 construction contract in 2020. During 2020, Cheyenne incurred costs of...
Vaughn Construction Company began work on a $423,000 construction contract in 2020. During 2020, Vaughn incurred costs of $295,500, billed its customer for $200,500, and collected $170,000. At December 31, 2020, the estimated additional costs to complete the project total $155,645. Prepare Vaughn’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...
Headland Construction Company began work on a $419,400 construction contract in 2017. During 2017, Headland incurred costs of $280,200, billed its customer for $216,300 and collected $174,500. At December 31, 2017, the estimated additional costs to complete the project total $161,600. Prepare Headland's journal entry to record proft 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...
During 2020, Stellar Company started a construction job with a
contract price of $1,620,000. The job was completed in 2022. The
following information is available.
2020
2021
2022
Costs incurred to date
$373,700
$749,360
$1,070,000
Estimated costs to complete
636,300
352,640
–0–
Billings to date
302,000
907,000
1,620,000
Collections to date
268,000
815,000
1,425,000
Compute the amount of gross profit to be recognized each year,
assuming the percentage-of-completion method is used.
Gross profit recognized in 2020
$enter a dollar amount...
During 2020, Pearl Company started a construction job with a
contract price of $1,590,000. The job was completed in 2022. The
following information is available.
2020
2021
2022
Costs incurred to date
$396,000
$806,600
$1,080,000
Estimated costs to complete
594,000
283,400
–0–
Billings to date
301,000
892,000
1,590,000
Collections to date
268,000
816,000
1,427,000
Compute the amount of gross profit to be recognized each year,
assuming the percentage-of-completion method is used.
Gross profit recognized in 2020
$enter a dollar amount...
During 2020, Sweet Company started a construction job with a contract price of $1,610,000. The job was completed in 2022. The following information is available. 2020 2021 2022 Costs incurred to date $380,000 $847,770 $1,069,000 Estimated costs to complete 620,000 253,230 –0– Billings to date 302,000 896,000 1,610,000 Collections to date 272,000 812,000 1,418,000 Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. Gross profit recognized in 2020 $enter a dollar amount...
During 2020, Bramble Company started a construction job with a
contract price of $1,610,000. The job was completed in 2022. The
following information is available.
2020
2021
2022
Costs incurred to date
$434,300
$859,560
$1,073,000
Estimated costs to complete
575,700
242,440
–0–
Billings to date
301,000
897,000
1,610,000
Collections to date
271,000
817,000
1,428,000
Compute the amount of gross profit to be recognized each year,
assuming the percentage-of-completion method is used.
Gross profit recognized in 2020
$enter a dollar amount...