On March 1, 2012, Chance Company entered into a contract to build an apartment b

Question

On March 1, 2012, Chance Company entered into a contract to build an apartment building. It is estimated that the building will cost 2,000,000 and will take 3 years to complete. The contract price was 3,000,000. The following information pertains to the construction period:

Costs to date: 2012- $600,000 2013- $1,560,000 2014- $2,100,000

Estimated costs to complete: 2012- $1,400,000 2013- $520,000 2014- $0

Progress: 2012- $1,050,000 2013- $2,000,000 2014-$3,000,000

Cash collected to date: 2012-$950,000 2013-$1,950,000 2014-$2,850,000

A) compute the amount of gross profit to be recognized each year, assuming the percentage of completeion method is used.

B) prepare all necessary journal entries for 2014

C) prepare a partial balance sheet for December 31, 2013 showing the balances in the receivables and inventory accounts

Explanation / Answer

http://www.doc88.com/p-997532262270.html

go to this link.problem 18.3,it has the solution so i did not typed it.If you still got your doubt please post a comment here.

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