MacDonalds Construction Co. was a low bidder on a construction project to build a dam for $1,800,000. Construction started during 2019 and was completed in 2020. Information relating to the contract is as follows: 2019 2020 Costs incurred during the year $ 450,000 $1,100,000 Estimated costs to complete 1,050,000 0 Billings during the year 400,000 1,400,000 Cash collections during the year 300,000 1,320,000 Required: (a) For EACH of the years ended 2019 and 2020, calculate the percentage of completion to date, revenue recognized for the year and the profit recognised for the year. (b) Provide the necessary journal entries at the end of 2019 and 2020 to record the above transactions relating to the above contract. (c) Compute the amount that remains unpaid on the dam project at the end of 2020.
MacDonalds Construction Co. was a low bidder on a construction project to build a dam for
$1,800,000. Construction started during 2019 and was completed in 2020. Information
relating to the contract is as follows:
2019 2020
Costs incurred during the year $ 450,000 $1,100,000
Estimated costs to complete 1,050,000 0
Billings during the year 400,000 1,400,000
Cash collections during the year 300,000 1,320,000
Required:
(a) For EACH of the years ended 2019 and 2020, calculate the percentage of completion to date, revenue recognized for the year and the profit recognised for the year.
(b) Provide the necessary
transactions relating to the above contract.
(c) Compute the amount that remains unpaid on the dam project at the end of 2020.
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