Question
In January 2019, Miller Construction Corp. contracted to construct a building for $3,600,000. Construction started in early 2019 and was completed in 2020. The following
In January 2019, Miller Construction Corp. contracted to construct a building for $3,600,000. Construction started in early 2019 and was completed in 2020. The following additional information is available:
| 2019 | 2020 | |
|---|---|---|
| Cost Incurred | $1,458,000 | $1,620,000 |
| Estimated costs to complete | 1,560,000 | - |
| Billed | 1,700,000 | 1,900,000 |
| Collections during the year | 1,440,000 | 2,160,000 |
Miller uses the percentage-of-completion method.
Under the contract-based approach for percentage completion,
a) How much revenue should Miller report for 2019 and 2020?
b) Prepare all journal entries for 2019 and 2020 for this contract.
c) What amounts would be presented on Millers December 31, 2019 Balance Sheet?
d) What is the gross profit on the project for each of 2019 and 2020?
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Understand Accounting
Authors: Claude Hitching, Derek Stone
1st Edition
0273018833, 978-0273018834
