E18-4 Answer - Details Cost to Date Contract price Less:...

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Details 2004 2005 2006 Cost to Date Contract price $1,500,000 $1,500,000 $1,500,000 Less: Estimated cost: Cost to Date $400,000 $935,000 $1,070,000 Estimated cost to complete 600000 165000 0 $1,000,000 $1,100,000 $1,070,000 Estimated total Gross profit $500,000 $400,000 $430,000 Percentage complete 40% 85% 100% 400000 935000 1070000 1000000 1100000 1070000 Details 2004 2005 2006 Revenue Recognized 2004- $1500000X40% $600,000 2005-$1500000X85% $1,275,000 Less: Revenue in 2004 600000 $675,000 Revenue in 2006 $1,500,000 Less: Revenue in 2005 1275000 $225,000 Gross profit recognized 2004-$500000X40% $200,000 2005-$400000X85% $340,000 Less: Gross profit recognized in 2004 200000 $140,000 Gross profit in 2006- $430000X100% $430,000 340000 $90,000
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Journal entries for 2005 (Percentage of completion method) To Recognize cost of construction Construction in process $535,000 Material,Cash,Payables etc $535,000 To Record process billing Account Receivable $600,000 Billing on construction in progress
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E18-4 Answer - Details Cost to Date Contract price Less:...

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