Question
During 2020, Blue Spruce Corporation started a construction job with a contract price of $3.92 million. Blue Spruce ran into severe technical difficulties during construction
During 2020, Blue Spruce Corporation started a construction job with a contract price of $3.92 million. Blue Spruce ran into severe technical difficulties during construction but managed to complete the job in 2022. The contract is non-cancellable. Under the terms of the contract, Blue Spruce sends billings as revenues are earned. Billings are non-refundable. The following information is available:
| 2020 | 2021 | 2022 | ||||
| Costs incurred to date | $ 560,000 | $1,960,000 | $3,820,000 | |||
| Estimated costs to complete | 2,940,000 | 1,960,000 | -0- |
Billings for the construction contract were as follows: 2020, $460,000; 2021, $1,900,000; and 2022, $1,560,000.
Calculate the balance of the Contract Asset/Liability account at the end of each year using the percentage-of-completion method. (Do not leave any answer field blank. Enter 0 for amounts.)
| December 31, 2020 | December 31, 2021 | December 31, 2022 | ||||
| Balance of the Contract Asset/Liability | $ | $ | $ |
eTextbook and Media
Calculate the balance of the Contract Asset/Liability account at the end of each year using the zero-profit and completed-contract methods. (Do not leave any answer field blank. Enter 0 for amounts.)
| December 31, 2020 | December 31, 2021 | December 31, 2022 | ||||
| Balance of the Contract Asset/Liability | $ | $ | $ |
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