Question
The company received a $5,000,000 contract to construct a high-rise building at an estimated cost of $4,200,000. The contract starts in March 2020, and ends
The company received a $5,000,000 contract to construct a high-rise building at an estimated cost of $4,200,000. The contract starts in March 2020, and ends in December 2022. The Company recognizes its revenue using the Percentage of Completion Method.
| 2020 | 2021 | 2022 | |
| Cost to Date | 1.000.000 | 2.100.000 | 4.200.000 |
| Estimate cost to complete | 3.000.000 | 2.100.000 | - |
| Progress Billing during the year | 1.000.000 | 2.800.000 | 1.200.000 |
| Cash Collected during the year | 800.000 | 2.000.000 | 2.200.000 |
Required:
1. Calculate the percentage of completion and gross profit for the year 2020-2022!
2. Make journals to record transactions related to the contract!
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Modern Advanced Accounting In Canada
Authors: Hilton Murray, Herauf Darrell
7th Edition
1259066487, 978-1259066481
