View the step-by-step solution to:

40 Name: Enter the appropriate amounts/formulas in the blue-shaded cells, or select from the drop-down list. The word "Wrong" will appear to the left...

Construction Accounting
The Rushing Construction Company obtained a construction ontract to build a highway and bridge over the Snake River It was estimated at the biginning of the contract that it would take three years to complete the project at an expected cost of $50,000,000. The contract price was $60,000,000. The project acutally took four years, being accepted as completed late in 2014. The following information describes the status of the job at the close of the production each year.

2011 2012 2013 2014 2015
Actual cost incurred 12,000,000 18,160,000 14,840,000 10,000,000 0
Estimated cost to complete 38,000,000 27,840,000 10,555,555 0 0
collections on contract 12,000,000 13,500,000 15,000,000 15,000,000 4,500,000
billings on contract 13,000,000 15,500,000 17,000,000 14,500,000 0

Instructions
1. What is the revenue, cost, and gross profit recognized for each of the years 2011-2015 under (a) the percentage of completion method and (b) the completed contract method?
2. Give the journal entries for each year assuming that the percentage of completion method is used. (note: round percentage to nearest whole percent for percentage completed)

-40 Name: Enter the appropriate amounts/formulas in the blue-shaded cells, or select from the drop-down list. The word “Wrong” will appear to the left of incorrect entries. 1. a. Percentage-of-Completion 2011 2012 2013 2014 1) Contract price 2) Actual cost incurred to date 3) Estimated cost to complete contract 4) Total estimated cost Percentage of completion to date Recognized revenue Recognized Recognized To Date in Prior Years in Current Year 2011: Recognized revenue Cost (actual cost) Gross profit 2012: Recognized revenue Cost (actual cost) Gross profit 2013: Recognized revenue Cost (actual cost) Gross profit 2014: Recognized revenue Cost Gross profit 2015: No gross profit recognized, only cash collection. 1. b. Completed-Contract No revenue, cost, or gross profit recognized for years 2011 - 2013. 2014: Gross revenue Cost of earned revenue Gross profit 2015: None recognized. Journal Entries for 2011 - 2014: 2011 2012 2013 2014 Debit Credit Debit Credit Debit Credit Debit Credit 2015 Journal Entry: Debit Credit
Background image of page 1
Sign up to view the entire interaction

Top Answer

Dear Student Please find... View the full answer

Accounting-8193694.xls

Actual cost incurred
Estimated cost to complete
Collections on contract
Billings on contract 2011
12,000,000
38,000,000
12,000,000
13,000,000 2012
18,160,000
27,840,000
13,500,000
15,500,000...

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online