Question
Part a ( 18 minutes 12 marks) In January 2021, Dykin Construction Corp. contracted to construct a building for $5,500,000. Construction started in early 2021
Part a ( 18 minutes 12 marks)
In January 2021, Dykin Construction Corp. contracted to construct a building for $5,500,000. Construction started in early 2021 and was completed in 2022. The following additional information is available:
2021 2022
Costs incurred to date............................ $2,450,500 $4,650,000
Estimated costs to complete................... 2,300,000
Amount billed customer......................... 2,900,000 2,600,000
Collections during the year..................... 2,450,000 2,800,000
Dykin uses the percentage-of-completion method.
Instructions
How much revenue should Dykin report for 2021 and 2022?
How much Gross Profit should Dykin recognize in 2021 and 2022?
Prepare the revenue and expense entries for 2022. Other entries are not required.
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