23578Question 619 pointsSave AnsweOn 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 becompleted 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 givenbelow.201920202021Costs incurred to date$4,320,000$7,665,000$10,950,000Estimated costs to complete5,280,0003,285,0001-0-Billings to date4,800,00010,050,00012,600,000Collections to date3,000,0008,250,0009,750,000Instructions: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 journal 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.For the toolbar, press ALT F10 (PC) or ALT-FN-F10 (Mac)BIVSParagraphMArial10pt+AEM2 I XOMacBook Air***www

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120 $7,665,000 3,285,000 10,050,000 1010 8,250,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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