Question
Problem 3 (15 Points) Lily Construction Company was the low bidder on a construction project to build indoor batting cages for $1,800,000. The project was
Problem 3 (15 Points)
Lily Construction Company was the low bidder on a construction project to build indoor batting cages for $1,800,000.
The project was begun in 2017 and completed in 2018. Cost and other data are presented below:
Costs incurred during the year 2017-- $450,000 2018-- $1,100,000
Estimated costs to complete 2017---1,050,000 2018-- 0
Billings during the year 2017--400,000 2018--1,400,000
Cash collections during the year 2017--300,000 2018---1,500,000
Prepare the journal entries for 2017 and 2018 assuming Lily uses the percentage of completion method.
Prepare the revenue recognition journal entries for 2017 and 2018 assuming Lily uses the completed contract
method.
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