Question
During 2020, Sunland Company started a construction job with a contract price of $1,408,000. The job was completed in 2022. The following information is available.
During 2020, Sunland Company started a construction job with a contract price of $1,408,000. The job was completed in 2022. The following information is available. The contract is non-cancellable.
| 2020 | 2021 | 2022 | ||||
|---|---|---|---|---|---|---|
| Costs incurred to date | $352,000 | $726,000 | $941,600 | |||
| Estimated costs to complete | 528,000 | 242,000 | 0 | |||
| Billings to date (non-refundable) | 264,000 | 792,000 | 1,408,000 | |||
| Collections to date | 237,600 | 712,800 | 1,254,000 |
QUESTION:
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.)
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Auditing The Art And Science Of Assurance Engagements
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Ingrid B. Splettstoesser-Hogeterp
11th Edition
0132088061, 978-0132088060
