Question
During 2021, Martinez Company started a construction job with a contract price of $1,580,000. The job was completed in 2023. The following information is available.
During 2021, Martinez Company started a construction job with a contract price of $1,580,000. The job was completed in 2023. The following information is available.
| 2021 | 2022 | 2023 | ||||
| Costs incurred to date | $404,000 | $853,160 | $1,073,000 | |||
| Estimated costs to complete | 606,000 | 254,840 | 0 | |||
| Billings to date | 301,000 | 904,000 | 1,580,000 | |||
| Collections to date | 271,000 | 812,000 | 1,418,000 |
Instructions:
- Complete a chart analyzing the above information showing revenue, the % of completion every year and the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
- Prepare all necessary journal entries for 2021, 2022, and 2023.
- Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used.
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Financial Accounting Tools for business decision making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
6th Edition
978-1119191674, 047053477X, 111919167X, 978-0470534779
