Question
Hamilton Construction Company uses the percentage-of-completion method of accounting. In 2014, Hamilton began work under contract #E2-D2, which provided for a contract price of $2,200,000.
Hamilton Construction Company uses the percentage-of-completion method of accounting. In 2014, Hamilton began work under contract #E2-D2, which provided for a contract price of $2,200,000. Other details follow: First number is for 2014, second one is for 2015
Costs incurred during the year
$640,000
$1,425,000
Estimated costs to complete, as of December 31
?960,000
-0-
Billings during the year
?420,000
?1,680,000
Collections during the year
?350,000
?1,500,000
(a) | What portion of the total contract price would be recognized as revenue in 2014? In 2015? |
(b) | Assuming the same facts as those above except that Hamilton uses the completed-contract method of accounting, what portion of the total contract price would be recognized as revenue in 2015? |
(c) | Prepare a complete set of journal entries for 2014 (using the percentage-of-completion method). |
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