Question

Required information [The following information applies to the questions displayed below.] Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,730,000. The project was begun in 2017 and completed in 2018. Cost and other data are presented below 2018 2017 $476,eee $1,030,e0e 884,e00 470,000 Costs incurred during the year Estimated costs to complete Billings during the yearr Cash collections during the year 1,260,00e 1,415,00e 370,000 Assume that Beavis recognizes revenue on this contract over time according to percentage of completion Required: Prepare all journal entries to record costs, billings, collections, and profit recognition. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 Record the entry for costs incurred during the year 2017. Note: Enter debits before credits. Date General Journal Debit Credit 2017 A

Answer 1

Date	Journal entry	Debit	Credit
2017	Work in progress A/C	476000
	To cash A/C		476000
2017	Construction Revenue A/C	605500
	TO receivables A/C		605500
2017	Receivables A/C	470000
	To billings		470000
2017	Cash A/C
	TO receivables	370000
2018	Work in progress A/C	1030000
	To cash A/C		1030000
2018	Construction Revenue A/C	1124500
	TO receivables A/C		1124500
2018	Receivables A/C	1260000
	To billings		1260000
2018	Cash A/C	1415000
	TO receivables		1415000

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Total cash collected is more than the actual revenue, therefore it is assumed that cash is collected included cash recivables for purpose other than for contract.

	Revenue to be recognised :
	Cost incurred	476000
	estimated cost to be incurred	884000
	Total cost	1360000
	% of project completed	0.35
	Total revenue of project	1730000
	Revenue to be recognised	605500
	Porfit on project	224000