On January 1, Miller Construction Company contracted to build a parking lot for the city of St. Louis for $675,000. The following transactions and estimates relate to this contract. Construction costs incurred during 2020 $360,000 Progress billings $171,000 Cash collections Estimated costs to complete Required a. Prepare the journal entry to record profit or loss assuming revenue is recognized over time. Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). Account Name Cost of Construction Construction in Process Revenues from Long-Term Contracts To recognize revenues and expenses Account Name $157,500 $360,000 Billings on Contracts Construction in Process Dr. 720,000 0 0 b. Prepare the journal entry to record profit or loss assuming revenue is recognized at a point in time. •Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). Cr. Dr. 675,000 0 0x 360,000 x 337,500 ✓ Cr. 0x 675,000 x
On January 1, Miller Construction Company contracted to build a parking lot for the city of St. Louis for $675,000. The following transactions and estimates relate to this contract. Construction costs incurred during 2020 $360,000 Progress billings $171,000 Cash collections Estimated costs to complete Required a. Prepare the journal entry to record profit or loss assuming revenue is recognized over time. Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). Account Name Cost of Construction Construction in Process Revenues from Long-Term Contracts To recognize revenues and expenses Account Name $157,500 $360,000 Billings on Contracts Construction in Process Dr. 720,000 0 0 b. Prepare the journal entry to record profit or loss assuming revenue is recognized at a point in time. •Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). Cr. Dr. 675,000 0 0x 360,000 x 337,500 ✓ Cr. 0x 675,000 x
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Transcribed Image Text:On January 1, Miller Construction Company contracted to build a parking lot for the city of St. Louis for $675,000. The following transactions and estimates relate to this contract.
Construction costs incurred during 2020 $360,000
Progress billings
$171,000
Cash collections
$157,500
Estimated costs to complete
$360,000
Required
a. Prepare the journal entry to record profit or loss assuming revenue is recognized over time.
•Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero).
Account Name
Cost of Construction
Construction in Process
Revenues from Long-Term Contracts V
To recognize revenues and expenses
Account Name
Billings on Contracts
Construction in Process
V
To recognize revenues and expenses
Dr.
720,000
b. Prepare the journal entry to record profit or loss assuming revenue is recognized at a point in time.
•Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero).
0
0
Dr.
675,000
Cr.
0
0 x
360,000 x
337,500 ✓
Cr.
0x
675,000 *
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