Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Q On June 1, 2019, Al-Bader Construction Company contracted to construct a building for Nass Company, for a total contract price of $12,600,000. The project

image text in transcribed
Q On June 1, 2019, Al-Bader Construction Company contracted to construct a building for Nass Company, for a total contract price of $12,600,000. The project was to be completed by October 31, 2021. The annual costs incurred, estimated costs to complete the contract, billings to Nass and collections for 2019, 2020, and 2021 are given below. 2019 2021 Costs incurred to date $4,320,000 2020 $7,665,000 3,285,000 $10.950.000 10 Estimated costs to complete 5.280,000 Billings to date 14,800,000 10,050,000 12.600.000 Collections to date 3,000,000 8.250,000 9,750,000 Instructions: If Al-Bader Company uses the percentage-of-completion method; 1. Compute the amount of gross profit or loss to be recognized each year. 2. Prepare all necessary joumal entries for 2020. 3. Prepare the journal entry to record the completion of the contract in 2021. 4 Prepare partial statement of financial position at December 31, 2019. 5 If Al-Bader Company uses the cost-recovery method, prepare the necessary journal entry to recognize any gross profit in 2021. Q On June 1, 2019, Al-Bader Construction Company contracted to construct a building for Nass Company, for a total contract price of $12,600,000. The project was to be completed by October 31, 2021. The annual costs incurred, estimated costs to complete the contract, billings to Nass and collections for 2019, 2020, and 2021 are given below. 2019 2021 Costs incurred to date $4,320,000 2020 $7,665,000 3,285,000 $10.950.000 10 Estimated costs to complete 5.280,000 Billings to date 14,800,000 10,050,000 12.600.000 Collections to date 3,000,000 8.250,000 9,750,000 Instructions: If Al-Bader Company uses the percentage-of-completion method; 1. Compute the amount of gross profit or loss to be recognized each year. 2. Prepare all necessary joumal entries for 2020. 3. Prepare the journal entry to record the completion of the contract in 2021. 4 Prepare partial statement of financial position at December 31, 2019. 5 If Al-Bader Company uses the cost-recovery method, prepare the necessary journal entry to recognize any gross profit in 2021

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Audit Quality Association Between Published Reporting Errors And Audit Firm Characteristics

Authors: Jonas Tritschler

2014 Edition

3658041730, 978-3658041731

More Books

Students also viewed these Accounting questions

Question

Write a Python program to check an input number is prime or not.

Answered: 1 week ago