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On January 1, 2023, Falcon Construction Ltd. starts a construction project for $4,500,000. Relevant data for 2023 and 2024 are as follows:                                                                                            2023                2024 Current year construction costs                               $3,300,000       $ 620,000 Estimated remaining costs to complete                        600,000                   -0- Current year billings                                                  3,100,000        1,400,000 Current year collections                                             3,000,000        1,500,000   Instructions Prepare the appropriate journal entries for both years using (a) the percentage-of-completion method, (b) the completed-contract method, and (c) the zero-profit method.

On January 1, 2023, Falcon Construction Ltd. starts a construction project for $4,500,000. Relevant data for 2023 and 2024 are as follows:                                                                                            2023                2024 Current year construction costs                               $3,300,000       $ 620,000 Estimated remaining costs to complete                        600,000                   -0- Current year billings                                                  3,100,000        1,400,000 Current year collections                                             3,000,000        1,500,000   Instructions Prepare the appropriate journal entries for both years using (a) the percentage-of-completion method, (b) the completed-contract method, and (c) the zero-profit method.

FINANCIAL ACCOUNTING
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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On January 1, 2023, Falcon Construction Ltd. starts a construction project for $4,500,000. Relevant data for 2023 and 2024 are as follows:

                                                                                           2023                2024

Current year construction costs                               $3,300,000       $ 620,000

Estimated remaining costs to complete                        600,000                   -0-

Current year billings                                                  3,100,000        1,400,000

Current year collections                                             3,000,000        1,500,000

 

Instructions

Prepare the appropriate journal entries for both years using (a) the percentage-of-completion method, (b) the completed-contract method, and (c) the zero-profit method.

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