Headland Construction Company began work on a $404,000 construction contract in 2020. During 2020, Headland incurred costs of $273,000, billed its customer for $232,000, and collected $182,000. At December 31, 2020, the estimated additional costs to complete the project total $163,660.Prepare Headland’s journal entry to record profit or loss, if any, using (a) the percentage-of-completion method and (b) the completed-contract method.

Q: How much gross profit should be reported for 2021?

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A: Percentage of Completion Method (POCM) is used to calculate the amount of revenue to be recognized…

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A: Answered:

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A: Accounts receivable is the balance of money due to a firm for goods or services delivered or used…

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A: Contract accounting means where the contract to build something for the customer will  take more…

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A: Solution: Total estimated gross profit by the end of 2019 = Gross profit for 2018 + Gross profit for…

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

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A: Total cost incurred $18522000 Estimated Cost to complete $37044000 Total cost $55566000

Q: rofit or loss contract m

A: Contract price402000Cost incurred in 2020252000Estimated additional cost to complete162405Total cost…

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

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A: Percentage of Completion method The purpose of using the percentage of completion method in contract…

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A: Revenue :— Revenue is the total amount of income generated by the sale of goods or services related…

Q: How much is the Gross Profit/Loss Realized in 2018?

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Q: s

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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.