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In 2010 Acme Construction Company won the contract to construct an office building at a contract price of $1,200,000. The information relating to the...

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In 2010 Acme Construction Company won the contract to construct an office building at a contract price of $1,200,000. The information relating to the costs and billings for this contract is shown below. 2010 2011 2012 Costs incurred to date ** $280,000 $600,000 $785,000 Estimated costs yet to be incurred 520,000 200,000 -0- Customer billings to date ** 250,000 500,000 1,200,000 Collections of billings to date ** 120,000 320,000 1.040,000 **Hint : You have to figure out the actual cost, billings, and collections for each respective year. The reason why, is because the information presented is “to date” not “Costs expended this year” as in the handouts and some of your assigned exercises/problems. Required: Using the percentage-of-completion method compute the following: 1- Percent complete for 2010 and 2011. 2- Revenue recognized for 2010 and 2011. 3- Gross Profit recognized for 2010 and 2011. 4- Prepare the journal entries for 2011. 5- Prepare a partial balance sheet for 2010 (Do not present the cash GL account). ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Answers sheet: 2010 2011 2012 Costs expended to date $280,000 $880,000 $ 1,665,000 / Estimated total costs 800,000 1,080,000 1,665,000 = % Complete 35% 81% 100% Contract price 1,200,000 1,200,000 1,200,000 x % complete 35 81 100 = Revenue recognized to date 420,000 9,720,000 1,200,000 − Revenue recogn. prior 0 (420,000) (9,720,000) = Revenue recogn. current 420,000 930,000 (8,520,000) Estimated total gross profit 400,000 120,000 (465,000)
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x % complete 35 81 100 = Gross profit recognized to date 140,000 972,000 (465,000) − Gross profit recogn. prior 0 140,000 (972,000) = Gross profit recogn. current 140,000 832,000 (507,000)
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Dear Student, I have made the journal entries... View the full answer

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