Question
Edwards Company contracted on 4/1/17. to construct a building for $4,800,000. The project was completed in 2019. Additional data follow: 2017 2018 2019 Costs incurred
Edwards Company contracted on 4/1/17. to construct a building for $4,800,000. The project was completed in 2019. Additional data follow:
| 2017 | 2018 | 2019 | |
| Costs incurred to date | $1,120,000 | $2,700,000 | $3,800,000 |
| Estimated cost to complete | 2,080,000 | 900,000 | ------ |
| Billings to date | 1,000,000 | 3,800,000 | 4,800,000 |
| Collections to date | 800,000 | 2,600,000 | 4,400,000 |
Instructions
Calculate the income recognized by Edwards under the percentage-of-completion method of accounting in each of the years 2017, 2018, and 2019.
Prepare all necessary entries for the year 2018.
Present the balance sheet disclosures at December 31, 2018. Proper headings or subheadings must be indicated.
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Accounting What the Numbers Mean
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,
9th Edition
978-0-07-76261, 0-07-762611-7, 9780078025297, 978-0073527062
