Question

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 2020. 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
	2019	2020	2021
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.
	2019	2020	2021
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

Answer-1:

	2019	2020	2021
Costs expended to date	2,80,000	6,00,000	7,85,000
Estimated total costs	8,00,000	8,00,000	7,85,000
% complete	35%	75%	100%
Contract price	12,00,000	12,00,000	12,00,000
% complete	35%	75%	100%
Revenue recognized to date	4,20,000	9,00,000	12,00,000
Revenue recognized prior	-	4,20,000	9,00,000
Revenue recognized current	4,20,000	4,80,000	3,00,000
Estimated total Gross profit	4,15,000	4,15,000	4,15,000
% complete	35%	75%	100%
Gross profit recognized to date	140,000	300,000	4,15,000
Gross profit recognized prior	-	140,000	300,000
Gross profit recognized current	140,000	160,000	115,000

Answer-2:

2019 Dr. Cr. $ 2,80,000 $ 2,80,000 2020 Dr. Cr. $ 3,20,000 $3,20,000 2021 Dr. Cr. $ 1,85,000 $ 1,85,000 Incurring costs Contract in progress Cash Billing 2,50,000 2,50,000 7,00,000 Account receivable Progress billing 2,50,000 2,50,000 7,00,000 Receiving payments 1,20,000 2,00,000 7,20,000 Cash Account receivable 1,20,000 2,00,000 7,20,000 Period end adjustment Construction exp for revenue Contract in progress Contract revenue 2,80,000 1,40,000 3,20,000 1,60,000 1,85,000 1,15,000 4,20,000 4,80,000 3,00,000 12,00,000 Completing the project Progress billing Contract in progress 12,00,000