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…

A: The gross profit is calculated as the difference between the revenue and cost of goods sold. The…

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

A: Blossom Company Discussed in Question is a Construction Company. We Understand that Construction…

Q: Swifty Corporation owns equipment that cost $70,800 when purchased on April 1, 2013. Depreciation…

A: A journal entry is used to record the day-to-day transactions of an organization by debiting and…

Q: On January 1, 2020, Miller Construction Company contracted to build a parking lot for the city of…

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A: (a) Year 2017:

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A: Contract price - $1,870,000   2023 (in $) 2024 (in $) Costs incurred during the year 429,000…

Q: Desert Homes (DH) constructed a new subdivision during 2017 and 2018 under contract with Actus…

A: Solution: Total revenue recognized in 2017 = Cost incurred in 2017 + Gross profit of 2017

Q: 8. Ahmed construction began work on a OMR10,000,000 contracts in 2016 to construct a bridge. During…

A: Cost Recovery Method - profits are only recognized when cash payments have recovered

Q: Cash Contract Estimated Total Billings Through Collections Costs Incurred Additional Contract…

A:

Q: 2016 2017 2018 $ 1.000.000.000,00 $ 2.916.000.000,00 $4.050.000.000,00 $ 3.000.000.000,00…

A: Contract Costing - A contract is a big job generally requiring an executing period of more than one…

Q: In the year 2020, Olive Construction Corporation began its work on a contract for $3,700,000. Other…

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Q: Oriole Enterprises Ltd. has entered into a contract beginning in February 2023 to build two…

A: Percentage of Completion MethodThis method is used to determine the revenue from the ongoing…

Q: Required: 1. Prepare journal entries to recognize revenue for 2018, 2019 and 2020. I

A: In Year 2018 Construction contract price: $8,360,000 %age completion=         $2,120,000…

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

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A: Given the following information: Marigold Corp. is constructing a building. Construction began…

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A: Weighted average interest rate on General borrowings =10%×$1,350,000…

Q: PAPASA Co. has consistently used the percentage of completion to account for its construction…

A: Total cost = Cost incurred to date + Estimated cost to complete = 2,700,000 + 900,000 = P3,600,000

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A: SOLUTION- A BALANCE SHEET IS A FINANCIAL STATEMENT THAT PRESENTS A COMPANY,S ASSETS , LIABILITY AND…

Q: On July 1, 2025, Wildhorse Construction Company Inc. contracted to build an office building for…

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Q: On July 1, 2025, Sunland Construction Company Inc. contracted to build an office building for Novak…

A: A firm can continue to recognize revenue according to the various phases of project or contract…

Q: Zent construction has an contract for $3,700,000. Other details follow: Costs incurred during the…

A: Percentage of completion method was used to account for contsruction contracts where revenues are…

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A: On the long-term construction contract, all future losses would be recognized immediately and future…

Q: In 2018, Ronaldo Construction Inc. agreed to construct an apartment building at a price of $10…

A: Construction accounting, is a form of project accounting applied to construction projects. It…

Q: During 2017 Apple Corporation built a new warehouse at a cost of $1,500,000 on land costing…

A: Cost of Warehouse=$15,00,000 Cost of land= $100,000 Outstanding Debt during 2017 = $1300,000…

Q: During 2025, Ivanhoe Company started a construction job with a contract price of $1,610,000. The job…

A: 2025 2026 2027 Billings during the year $302,000 $594,000 (i.e. $896,000-$302,000) $714,000…

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A: Journal entries are the primary reporting of the business transactions in the books of accounts.…

Q: additional costs to complete the project total $159, 650. Prepare Oriole's journal entry to record…

A: The percentage-of-completion method recognizes revenue and expenses based on the proportion of work…

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A: Under construction process, the revenue or loss can be calculated on the basis of percentage of work…

Q: Roe Construction Company uses the percentage-of-completion method of accounting. In 2021, Roe began…

A: Under the Percentage of completion method, the revenue is recognized at different stages as agreed…

Q: Dalton Construction Co. contracted to build a bridge for $10,000,000. Construction began in 2021 and…

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A: An income statement, also known as a profit and loss statement or P&L statement, is a financial…

Q: Zorzi b egan work on a $420,000 construction contract in 2017. During 2017 Zorzi incurred costs of…

A: Given, Cost incurred $278,000   Estimated Additional Cost $162,000   Total Cost $440,000…

Q: G Company agreed to build a building for K Corporations. The contract price is $4,200,000. Data…

A: The total cost of the project is the sum of the costs incurred in each year. So, we add up the costs…

Q: JRE2 Inc. entered into a contract to install a pipeline for a fixed price of $2,485,000. JRE2…

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.