In 2021, the Kokosing Construction Company of Columbus, Ohio entered into a contract to construct a road for Franklin County for $20,000,000. The road was completed in 2023. Information pertaining to the contract is provided below: 2021 2022 2023 Costs incurred during the year $4,800,000 $7,200,000 $4,400,000 Estimated costs to complete as of year end 11,200,000 4,000,000 Billings during the year 4,000,000 8,000,000 8,000,000 Cash Collections during the year 3,600,000 7,200,000 9,200,000 Kokosing recognizes revenue over time according to percentage of completion. Required: 1. Compute the amount of revenue and gross profit to be recognized in 2021, 2022, and 2023. 2. Prepare the necessary journal entries for 2021 and 2022. Use the following accounts for your journal entries - "Construction in Progress", "Cash, Materials etc.", "Accounts Receivable", "Billings on Construction in Progress", "Cash", "Cost of Construction", and "Revenue from Long-term contracts". 3. Prepare a partial balance sheet for 2021 and 2022 showing any items related to the contract. Indicate whether any of the amounts indicated are assets or liabilities. NOTE: Prepare only ONE Balance Sheet.

In 2021, the Kokosing Construction Company of Columbus, Ohio entered into a contract to construct a road for Franklin County for $20,000,000. The road was completed in 2023. Information pertaining to the contract is provided below: 2021 2022 2023 Costs incurred during the year $4,800,000 $7,200,000 $4,400,000 Estimated costs to complete as of year end 11,200,000 4,000,000 Billings during the year 4,000,000 8,000,000 8,000,000 Cash Collections during the year 3,600,000 7,200,000 9,200,000 Kokosing recognizes revenue over time according to percentage of completion. Required: 1. Compute the amount of revenue and gross profit to be recognized in 2021, 2022, and 2023. 2. Prepare the necessary journal entries for 2021 and 2022. Use the following accounts for your journal entries - "Construction in Progress", "Cash, Materials etc.", "Accounts Receivable", "Billings on Construction in Progress", "Cash", "Cost of Construction", and "Revenue from Long-term contracts". 3. Prepare a partial balance sheet for 2021 and 2022 showing any items related to the contract. Indicate whether any of the amounts indicated are assets or liabilities. NOTE: Prepare only ONE Balance Sheet.

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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