Question 14 Inexperienced construction company Martinez Corp. signed a risky non-cancellable contract to build a research facility at a fixed contract amount of $2,300,000. The work began in early 2020 and Martinez incurred costs of $1,035,000. At December 31, 2020, the estimated future costs to complete the project totalled $1,035,000. During 2021, Martinez ran into trouble with weather conditions and incurred the expected costs of $1,035,000 and estimated that it would need to spend an additional $355,000 to complete the project. During 2022, Martinez reluctantly completed the project, incurring further costs of $380,000. Prepare the December 31, 2021 year-end journal entry to record any loss from the contract assuming Martinez uses the completed-contract 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 O for the amounts.) Date December 31, 2021 Account Titles and Explanation Debit Credit
Question 14 Inexperienced construction company Martinez Corp. signed a risky non-cancellable contract to build a research facility at a fixed contract amount of $2,300,000. The work began in early 2020 and Martinez incurred costs of $1,035,000. At December 31, 2020, the estimated future costs to complete the project totalled $1,035,000. During 2021, Martinez ran into trouble with weather conditions and incurred the expected costs of $1,035,000 and estimated that it would need to spend an additional $355,000 to complete the project. During 2022, Martinez reluctantly completed the project, incurring further costs of $380,000. Prepare the December 31, 2021 year-end journal entry to record any loss from the contract assuming Martinez uses the completed-contract 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 O for the amounts.) Date December 31, 2021 Account Titles and Explanation Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
domestic
Transcribed Image Text:Question 14
Inexperienced construction company Martinez Corp. signed a risky non-cancellable contract to build a research facility
at a fixed contract amount of $2,300,000. The work began in early 2020 and Martinez incurred costs of $1,035,000.
At December 31, 2020, the estimated future costs to complete the project totalled $1,035,000. During 2021, Martinez
ran into trouble with weather conditions and incurred the expected costs of $1,035,000 and estimated that it would
need to spend an additional $355,000 to complete the project. During 2022, Martinez reluctantly completed the
project, incurring further costs of $380,000.
Prepare the December 31, 2021 year-end journal entry to record any loss from the contract assuming Martinez uses
the completed-contract 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
O for the amounts.)
Date
December 31, 2021
Account Titles and Explanation
Debit
Credit
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education