Question
Hi please help me i am stuck on this question. On February 1, 2016, Arrow Construction Company entered into a three-year construction contract to build
Hi please help me i am stuck on this question. On February 1, 2016, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,150,000. During 2016, costs of $2,060,000 were incurred, with estimated costs of $4,060,000 yet to be incurred. Billings of $2,572,000 were sent and cash collected was $2,310,000. |
In 2017, costs incurred were $2,572,000 with remaining costs estimated to be $3,690,000. 2017 billings were $2,822,000, and $2,535,000 cash was collected. The project was completed in 2018 after additional costs of $3,860,000 were incurred. The companys fiscal year-end is December 31. This project does not qualify for revenue recognition over time. |
Required: | |
1. | Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. |
2-a. | Prepare journal entries for 2016 to record the transactions described (credit "various accounts" for construction costs incurred). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
2-b. | Prepare journal entries fo 2017 to record the transactions described (credit "various accounts" for construction costs incurred). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
3-a. | Prepare a partial balance sheet to show the presentation of the project as of December 31, 2016.(Do not round intermediate calculations. Round your answers to the nearest dollar amount.) |
3-b. | Prepare a partial balance sheet to show the presentation of the project as of December 31, 2017.(Do not round intermediate calculations. Round your answers to the nearest dollar amount.) |
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