Metlock Inc. began work on a $11,300,000 non-cancellable contract in 2020 to construct an office building. During 2020, Metlock Inc. incurred costs of $1,092,000, billed its customers for $1,200,000 (non-refundable), and collected $990,000. At December 31, 2020, the estimated future costs to complete the project totalled $3,108,000.Prepare Metlock’s 2020 journal entries using the percentage-of-completion method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)Account Titles and ExplanationDebitCreditenter an account title to record cost of construction No Entry / Contract Asset/Liability / Materials, Cash, Payables / Revenue from Long-Term Contracts / Accounts Receivable / Construction Expensesenter a debit amountenter a credit amountenter an account title to record cost of construction Materials, Cash, Payables / No EntryConstruction Expenses / Accounts Receivable / Contract Asset/Liability / Revenue from Long-Term Contractsenter a debit amountenter a credit amount(To record cost of construction) enter an account title to record progress billings No Entry / Accounts Receivable / Construction Expenses / Cash / Revenue from Long-Term Contracts / Contract Asset/Liabilityenter a debit amountenter a credit amountenter an account title to record progress billings Construction Expenses / Accounts Receivable / Contract Asset/LiabilityNo Entry / Revenue from Long-Term Contracts / Cashenter a debit amountenter a credit amount(To record progress billings) enter an account title to record collections Accounts Receivable / Cash / No Entry / Revenue from Long-Term Contracts / Construction Expenses / Contract Asset/Liabilityenter a debit amountenter a credit amountenter an account title to record collections Cash / Accounts Receivable / No Entry / Contract Asset/Liability / Construction Expenses / Revenue from Long-Term Contractsenter a debit amountenter a credit amount(To record collections) enter an account title to record revenues Contract Asset/Liability / Revenue from Long-Term Contracts / Cash / Construction Expenses / No Entry / Accounts Receivableenter a debit amountenter a credit amountenter an account title to record revenues Contract Asset/Liability / Accounts Receivable / Construction Expenses / Revenue from Long-Term Contracts / Cash / No Entryenter a debit amountenter a credit amount(To record revenues) enter an account title to record construction expenses Revenue from Long-Term Contracts / Cash / Construction Expenses / Accounts Receivable / No Entry / Contract Asset/Liabilityenter a debit amountenter a credit amountenter an account title to record construction expenses Accounts Receivable / Cash / Revenue from Long-Term Contracts / Contract Asset/Liability / No Entry / Construction Expensesenter a debit amountenter a credit amount(To record construction expenses)

Introduction: Journal: Recording of a business transactions in a chronological order. First step in…

Answered: Metlock Inc. began work on a…

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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Metlock Inc. began work on a $11,300,000 non-cancellable contract in 2020 to construct an office building. During 2020, Metlock Inc. incurred costs of $1,092,000, billed its customers for $1,200,000 (non-refundable), and collected $990,000. At December 31, 2020, the estimated future costs to complete the project totalled $3,108,000.

Prepare Metlock’s 2020 journal entries using the percentage-of-completion method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title to record cost of construction No Entry / Contract Asset/Liability / Materials, Cash, Payables / Revenue from Long-Term Contracts / Accounts Receivable / Construction Expenses	enter a debit amount	enter a credit amount
enter an account title to record cost of construction Materials, Cash, Payables / No EntryConstruction Expenses / Accounts Receivable / Contract Asset/Liability / Revenue from Long-Term Contracts	enter a debit amount	enter a credit amount
(To record cost of construction)
enter an account title to record progress billings No Entry / Accounts Receivable / Construction Expenses / Cash / Revenue from Long-Term Contracts / Contract Asset/Liability	enter a debit amount	enter a credit amount
enter an account title to record progress billings Construction Expenses / Accounts Receivable / Contract Asset/LiabilityNo Entry / Revenue from Long-Term Contracts / Cash	enter a debit amount	enter a credit amount
(To record progress billings)
enter an account title to record collections Accounts Receivable / Cash / No Entry / Revenue from Long-Term Contracts / Construction Expenses / Contract Asset/Liability	enter a debit amount	enter a credit amount
enter an account title to record collections Cash / Accounts Receivable / No Entry / Contract Asset/Liability / Construction Expenses / Revenue from Long-Term Contracts	enter a debit amount	enter a credit amount
(To record collections)
enter an account title to record revenues Contract Asset/Liability / Revenue from Long-Term Contracts / Cash / Construction Expenses / No Entry / Accounts Receivable	enter a debit amount	enter a credit amount
enter an account title to record revenues Contract Asset/Liability / Accounts Receivable / Construction Expenses / Revenue from Long-Term Contracts / Cash / No Entry	enter a debit amount	enter a credit amount
(To record revenues)
enter an account title to record construction expenses Revenue from Long-Term Contracts / Cash / Construction Expenses / Accounts Receivable / No Entry / Contract Asset/Liability	enter a debit amount	enter a credit amount
enter an account title to record construction expenses Accounts Receivable / Cash / Revenue from Long-Term Contracts / Contract Asset/Liability / No Entry / Construction Expenses	enter a debit amount	enter a credit amount
(To record construction expenses)

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