Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Creative Robotics Inventions Inc. (CRA Inc.) is building a flying personal vehicle for a contract price of $360,000,000. This is estimated to be a three-year
Creative Robotics Inventions Inc. (CRA Inc.) is building a flying personal vehicle for a contract price of $360,000,000. This is estimated to be a three-year project with an estimated cost of $300,000,000. CRA Inc. uses the percentage of completion method of revenue recognition, using the engineering estimates to determine the percentage of work completed. The following is the best available information at the end of each year: ('000) Costs incurred each year Estimated costs to complete Completion estimates Required: Year 1 63,000 245,500 20% Year 2 126,500 173,500 55% Year 3 143,600 0 100% Prepare journal entries to recognize income and expenses over the project's life. (10 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started