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: 2020 $1,100,000 Costs incurred during the year Estimated costs to complete Billings during the year Cash collections during the year 2019 $ 450,000 1,050,000 400,000 300,000 1,400,000 1,320,000 Required: (a) For EACH of the years ended 2019 and 2020, calculate the percentage of completion to- date, 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 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: 2020 $1,100,000 Costs incurred during the year Estimated costs to complete Billings during the year Cash collections during the year 2019 $ 450,000 1,050,000 400,000 300,000 1,400,000 1,320,000 Required: (a) For EACH of the years ended 2019 and 2020, calculate the percentage of completion to- date, 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 above transactions relating to the above contract. (c) Compute the amount that remains unpaid on the dam project at the end of 2020.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 26E
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![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:
2020
$1,100,000
Costs incurred during the year
Estimated costs to complete
Billings during the year
Cash collections during the year
2019
$ 450,000
1,050,000
400,000
300,000
1,400,000
1,320,000
Required:
(a)
For EACH of the years ended 2019 and 2020, calculate the percentage of completion to-
date, 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 above
transactions relating to the above contract.
(c) Compute the amount that remains unpaid on the dam project at the end of 2020.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F32549460-98a2-41b4-a057-191eaa6ba8ad%2Fd9dd91ef-9149-4c6d-9ae5-c156aa4c6527%2F5ukxzcg.jpeg&w=3840&q=75)
Transcribed Image Text: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:
2020
$1,100,000
Costs incurred during the year
Estimated costs to complete
Billings during the year
Cash collections during the year
2019
$ 450,000
1,050,000
400,000
300,000
1,400,000
1,320,000
Required:
(a)
For EACH of the years ended 2019 and 2020, calculate the percentage of completion to-
date, 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 above
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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