Buildit Corp. was contracted to construct a building for $2,440,000. The contract provided for progress payments. Buildit's accounting year ends 31 December. Work began under the contract on 1 March 20X3, and was completed on 30 November 20X5. Construction activities are summarized below by year: 20x3 20x4 20x5 Construction costs incurred during the year, $610,000; estimated costs to complete, $1,110,000; progress billings during the year, $520,000; and collections, $430,000. Construction costs incurred during the year, $980,000; estimated costs to complete, $350,000; progress billing during the year, $1,690,000; and collections, $1,430,000. Construction costs incurred during the year, $330,000. Because the contract was completed, the remaining balance was billed and later collected in full. per the contract. Required: 1. Prepare Buildit's journal entries to record these events. Assume that percentage of completion is measured by the ratio of costs incurred to date divided by total estimated construction costs. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar. Enter answer in thousands, not in million or in whole Canadian dollars.)
Buildit Corp. was contracted to construct a building for $2,440,000. The contract provided for progress payments. Buildit's accounting year ends 31 December. Work began under the contract on 1 March 20X3, and was completed on 30 November 20X5. Construction activities are summarized below by year: 20x3 20x4 20x5 Construction costs incurred during the year, $610,000; estimated costs to complete, $1,110,000; progress billings during the year, $520,000; and collections, $430,000. Construction costs incurred during the year, $980,000; estimated costs to complete, $350,000; progress billing during the year, $1,690,000; and collections, $1,430,000. Construction costs incurred during the year, $330,000. Because the contract was completed, the remaining balance was billed and later collected in full. per the contract. Required: 1. Prepare Buildit's journal entries to record these events. Assume that percentage of completion is measured by the ratio of costs incurred to date divided by total estimated construction costs. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar. Enter answer in thousands, not in million or in whole Canadian dollars.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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