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. Informationrelating to the contract is as follows:2019 2020Costs incurred during the year $ 450,000 $1,100,000Estimated costs to complete 1,050,000 0Billings during the year 400,000 1,400,000Cash collections during the year 300,000 1,320,000Required:(a) For EACH of the years ended 2019 and 2020, calculate the percentage of completion todate, revenue recognised 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 abovetransactions 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 todate, revenue recognised 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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