Question

Exercise 18-33 (Part Level Submission)

During 2020, Novak Company started a construction job with a contract price of $1,580,000. The job was completed in 2022. The following information is available.

		2020		2021		2022
Costs incurred to date		$383,800		$807,380		$1,070,000
Estimated costs to complete		626,200		298,620		–0–
Billings to date		297,000		895,000		1,580,000
Collections to date		271,000		807,000		1,433,000

Prepare all necessary journal entries for 2021. (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. For costs incurred use account Materials, Cash, Payables.)

Account Titles and Explanation	Debit	Credit
(To record cost of construction.)
(To record progress billings.)
(To record collections.)
(To recognize revenue.)

List of Accounts:

Accounts Receivable
Accounts Payable
Advertising Expense
Allowance for Sales Returns and Allowances
Billings on Construction in Process
Cash
Commission Expense
Commission Revenue
Construction in Process
Construction Expenses
Cost of Goods Sold
Cost of Installment Sales
Deferred Gross Profit
Delivery Expense
Discount on Notes Receivable
Estimated Inventory Returns
Finished Goods Inventory
Franchise Revenue
Freight-Out
Gain on Repossession
Income Summary
Installment Accounts Receivable
Installment Sales Revenue
Interest Expense
Interest Revenue
Inventory
Inventory on Consignment
Liability to Enyart Company
License Revenue
Loss from Long-Term Contracts
Loss on Repossession
Materials, Cash, Payables
No Entry
Notes Receivable
Operating Expenses
Payable to Consignor
Purchases
Realized Gross Profit
Repossessed Merchandise
Retained Earnings
Returned Inventory
Revenue from Consignment Sales
Revenue from Franchise Fees
Revenue from Long-Term Contracts
Sales Discounts
Sales Discounts Forfeited
Sales Returns and Allowances
Sales Revenue
Service Revenue
Unearned Franchise Revenue
Unearned Sales Revenue
Unearned Service Revenue
Warranty Expense

Answer 1

Answer

• Requirement asked: Journal entries 2021

Date	Accounts title	Debit	Credit
2021	Construction in Progress	$423,580
	Material, Cash Payables		$423,580
	(construction cost incurred)
2021	Accounts receivables	$598,000
	Billing on Construction in Process		$598,000
	(amount billed during the year)
2021	Cash	$536,000
	Accounts receivables		$536,000
	(cash received)
2021	Construction in Progress	$129,420
	Construction expense	$423,580
	Revenue from Long Term contract		$553,000
	(revenue recognised)