Question
Q.3 Brown Construction Company has a contract to construct a $620,000 shopping mall at an estimated cost of $450,000. The contract is to start in
Q.3 Brown Construction Company has a contract to construct a $620,000 shopping mall at an estimated cost of $450,000. The contract is to start in 2019, and the shopping mall is to be completed in 2021. The following data pertain to the construction period.
|
| 2019 | 2020 | 2021 |
| Yearly Cost | $ 72,800 | $ 140,640 | $ 252,000 |
| Cost to Date (cumulative) | 72,800 | 213,440 | 465,440 |
| Estimated Cost to Complete | 382,200 | 250,560 | - |
| Progress Billing During The Year | 91,200 | 280,000 | 248,800 |
| Cash Collected During The Year | 88,000 | 275,000 | 242,500 |
Required:
a. Prepare partially Income Statements for the year 2019, 2020, and 2021 by using Completed Contract Method.
b. Prepare partially Income Statements for the year 2019, 2020, and 2021 by using Percentage of Completion Method. Show your calculations.
c. Prepare the partially Balance Sheet as of December 31, 2019 by using Percentage of Completion Method.
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