During 2020, Carla Company started a construction job with a contract price of $1,580,000. The job was completed in 2022. The following information is available. 2020 2021 2022 Costs incurred to date $383,800 $807,380 $1,070,000 Estimated costs to complete 626,200 298,620 –0– Billings to date 297,000 895,000 1,580,000 Collections to date 271,000 807,000 1,433,000 Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. Gross profit recognized in 2020 $enter a dollar amount Gross profit recognized in 2021 $enter a dollar amount Gross profit recognized in 2022 $enter a dollar amount Prepare all necessary journal entries for 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. For costs incurred use account Materials, Cash, Payables.) Account Titles and Explanation Debit Credit enter an account title to record cost of construction enter a debit amount enter a credit amount enter an account title to record cost of construction enter a debit amount enter a credit amount (To record cost of construction.) enter an account title to record progress billings enter a debit amount enter a credit amount enter an account title to record progress billings enter a debit amount enter a credit amount (To record progress billings.) enter an account title to record collections enter a debit amount enter a credit amount enter an account title to record collections enter a debit amount enter a credit amount (To record collections.) enter an account title to recognize revenue enter a debit amount enter a credit amount enter an account title to recognize revenue enter a debit amount enter a credit amount enter an account title to recognize revenue enter a debit amount enter a credit amount (To recognize revenue.) Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used. 2020 2021 2022 Gross profit $enter a dollar amount $enter a dollar amount $enter a dollar amount

During 2020, Carla Company started a construction job with a contract price of $1,580,000. The job was completed in 2022. The following information is available. 2020 2021 2022 Costs incurred to date $383,800 $807,380 $1,070,000 Estimated costs to complete 626,200 298,620 –0– Billings to date 297,000 895,000 1,580,000 Collections to date 271,000 807,000 1,433,000 Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. Gross profit recognized in 2020 $enter a dollar amount Gross profit recognized in 2021 $enter a dollar amount Gross profit recognized in 2022 $enter a dollar amount Prepare all necessary journal entries for 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. For costs incurred use account Materials, Cash, Payables.) Account Titles and Explanation Debit Credit enter an account title to record cost of construction enter a debit amount enter a credit amount enter an account title to record cost of construction enter a debit amount enter a credit amount (To record cost of construction.) enter an account title to record progress billings enter a debit amount enter a credit amount enter an account title to record progress billings enter a debit amount enter a credit amount (To record progress billings.) enter an account title to record collections enter a debit amount enter a credit amount enter an account title to record collections enter a debit amount enter a credit amount (To record collections.) enter an account title to recognize revenue enter a debit amount enter a credit amount enter an account title to recognize revenue enter a debit amount enter a credit amount enter an account title to recognize revenue enter a debit amount enter a credit amount (To recognize revenue.) Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used. 2020 2021 2022 Gross profit $enter a dollar amount $enter a dollar amount $enter a dollar amount

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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During 2020, Carla Company started a construction job with a contract price of $1,580,000. The job was completed in 2022. The following information is available.

	2020	2021	2022
Costs incurred to date	$383,800	$807,380	$1,070,000
Estimated costs to complete	626,200	298,620	–0–
Billings to date	297,000	895,000	1,580,000
Collections to date	271,000	807,000	1,433,000

Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.

Gross profit recognized in 2020		$enter a dollar amount
Gross profit recognized in 2021		$enter a dollar amount
Gross profit recognized in 2022		$enter a dollar amount

Prepare all necessary journal entries for 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. For costs incurred use account Materials, Cash, Payables.)

Account Titles and Explanation	Debit	Credit
enter an account title to record cost of construction	enter a debit amount	enter a credit amount
enter an account title to record cost of construction	enter a debit amount	enter a credit amount
(To record cost of construction.)
enter an account title to record progress billings	enter a debit amount	enter a credit amount
enter an account title to record progress billings	enter a debit amount	enter a credit amount
(To record progress billings.)
enter an account title to record collections	enter a debit amount	enter a credit amount
enter an account title to record collections	enter a debit amount	enter a credit amount
(To record collections.)
enter an account title to recognize revenue	enter a debit amount	enter a credit amount
enter an account title to recognize revenue	enter a debit amount	enter a credit amount
enter an account title to recognize revenue	enter a debit amount	enter a credit amount
(To recognize revenue.)

Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used.

		2020		2021		2022
Gross profit		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount

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