Question
During 2020, Pharoah Company started a construction job with a contract price of $1,344,000. The job was completed in 2022. The following information is available.
During 2020, Pharoah Company started a construction job with a contract price of $1,344,000. The job was completed in 2022. The following information is available. The contract is non-cancellable.
2020 | 2021 | 2022 | ||||
---|---|---|---|---|---|---|
Costs incurred to date | $336,000 | $693,000 | $898,800 | |||
Estimated costs to complete | 504,000 | 231,000 | 0 | |||
Billings to date (non-refundable) | 252,000 | 756,000 | 1,344,000 | |||
Collections to date | 226,800 | 680,400 | 1,197,000 |
Incorrect answer icon Your answer is incorrect.
A. Calculate the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
B. Prepare all necessary journal entries for 2021. (Use Materials, Cash, Payables for costs incurred to date.
C. Calculate the amount of gross profit to be recognized each year, assuming the completed-contract method is used.
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