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Please help! confused Hydo-Pro Dam Builders develops large scale hydro-electric dam projects. The company has been the main contractor on dam projects on every continent
Please help! confused
Hydo-Pro Dam Builders develops large scale hydro-electric dam projects. The company has been the main contractor on dam projects on every continent and on some of the world's greatest rivers. Hydro-Pro has just begun a project to build a series of dams on the Amazon river. The first phase of the project is $900 million and is expected to take 3 years to complete. Here are some of the relevant facts (All dollar numbers below are in millions): Contract price: $900 2018 2019 2020 $ 72 $ 593 $ 255 $ 728 $ 285 $0 Construction costs incurred in the current year: Estimated costs to complete the contract at end of the year. Billings on the contract in the current year. Dollars collected on billings in the current year. $ 150 $ 600 $ 150 $ 100 $ 630 $ 170 Balance Sheet December 31, 2017 Cash Common Stock Retained Earnings $ 300 $ 125 175 Requirement: Use the percentage-of-completion contract method to do the following for the year 2018 and 2019 of the contract: 1) complete the necessary calculations using the spreadsheet provided in the next page, 2) prepare all necessary journal entries, 3) show the relevant Balance Sheet presentation for the year 2018. 2018 2019 Contract Price 900 900 72 593 Costs in Current Year Costs in Prior Year(s) Cumulative Costs to Date 728 285 Estimated Costs to Complete Total Estimated Costs 900 900 Total Contract Price Completion Percentage Cumulative Revenue Recognized to date Revenue Recognized in Prior Year(s) Revenue to Recognize Current Year Estimated Gross Profit Completion Percentage Cumulative Gross profit Recognized to date Gross Profit Recognized in Prior Year(s) Gross Profit to Recognize Current Year 150 600 Billings on Contract in Current Year $ Collected in Current Year 100 630Step by Step Solution
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