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The Aqua Company is involved in a three-year long-term contract. The following data relate to this contract: 2016 2017 2018 Total Contract Price $ 200,000
The Aqua Company is involved in a three-year long-term contract. The following data relate to this contract: | ||||
2016 | 2017 | 2018 | Total | |
Contract Price | $ 200,000 | |||
Costs incurred each year | $ 24,000 | $ 56,000 | $ 30,000 | $ 110,000 |
Costs incurred to date | $ 24,000 | $ 80,000 | $ 110,000 | |
Estimated cost to complete | $ 96,000 | $ 40,000 | $ - | |
Partial billings each year | $ 50,000 | $ 112,000 | $ 38,000 | |
Cash collected from billings | $ 35,000 | $ 120,000 | $ 45,000 | |
Required: | ||||
Prepare the journal entries for each of the following assuming Aqua satisfies its performance obligation. | ||||
2016 Entries | ||||
a. Construction costs for the year | ||||
b. Partial billings | ||||
c. Cash collections | ||||
d. Gross Profit | ||||
2017 Entries | ||||
a. Construction costs for the year | ||||
b. Partial billings | ||||
c. Cash collections | ||||
d. Gross Profit | ||||
2018 Entries | ||||
a. Construction costs for the year | ||||
b. Partial billings | ||||
c. Cash collections | ||||
d. Gross Profit and closing of construction accounts |
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