Question
Super Good Corp. contracted to build a bridge for $ 5,000,000. Construction began in 2020 and was completed in 2021. Data relating to the construction
Super Good Corp. contracted to build a bridge for $ 5,000,000. Construction began in 2020 and was completed in 2021. Data relating to the construction are:
2020 2021
Costs incurred....................................................................... $ 1,620,000 $ 1,400,000
Estimated costs to complete................................................... 1,380,000
Instructions
Using the percentage-of-completion method and the cost-to-cost basis
a) How much revenue should be reported for 2020? Show your calculation.
b) Prepare the journal entry to record progress billings of $ 1,700,000 during 2020.
c) Prepare the journal entry to record the revenue and gross profit for 2020.
d) How much gross profit should be reported for 2021? Show your calculation.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started