Archer Construction Company began work on a $420,000 construction contract in 2017. During 2017, Archer incurred costs of $278,000, billed its customer for $215,000, and collected $175,000. At December 31, 2017, the estimated additional costs to complete the project total $162,000. Prepare Archer’s journal entry to record profit or loss, if any, using (a) the percentage-of-completion method and (b) the completed-contract method.

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Q: 29) Horner Construction uses the method. In percentage-of-completion 2024, Honer began work on a…

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Q: 2020 2021 2022 Costs for the year $3,800 4,600 1.150 Estimated costs to complete 4,600 1,220 -0-…

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A: (a) Year 2017:

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A: Journal entry is a primary entry that records the financial transactions initially.

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A: Gross profit is a  fiscal term that measures the difference between deals  profit and cost of goods…

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.