Considering the following data for a project begun in 2018 by Timber Construction, with a contract price of $3,000,000....
Considering the following data for a project begun in 2018 by Timber Construction, with a contract price of $3,000,000. Dominion’s customer controls the building during the period of construction.
|
2018 |
2019 |
|
|
Current period costs |
$360,000 |
$440,000 |
|
Estimated additional costs to complete |
1,440,000 |
800,000 |
|
Progress billings |
350,000 |
300,000 |
|
Collection on billings-current year |
200,000 |
200,000 |
Using the table below, calculate the revenue to be recognized by Timber Construction during 2018 and 2019. Assume that percentage of completion is measured by the ratio of costs incurred to date divided by total estimated construction costs. .
Be sure to include ALL of your calculations in the table including the gross profit earned by Timber Construction in each year. Express gross profit margin in dollars and in percentage terms for each year.
Round all your percentage calculations to the nearest whole percent.
Using the information in your table, prepare all of the required journal entries for 2018 only.
|
Year(s) |
2018 |
2019 |
|
General Journal |
|||
|
Date |
Account Titles and Explanation |
Debit |
Credit |
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