The Leto Construction Company began work on a $12,000 contract on 1/1/20. Planned completion was in 2022. The Percentage-of Completion method is used. Given the following: Costs incurred to date Estimated costs to complete Billings to date Collections to date 2020 $2,500 7,500 4,000 3,800 Select one: O a. $4,300 O b. $5,040 O c. $5,000 O d. $4,200 Oe. $4,800 December 31 2021 $4,200 6,300 5,100 5,000 The 12/31/21 balance of Construction in Progress is: 2022 $11,550 0 12,000 11,900

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Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.