Percentage-of-Completion Method: Dalton Construction Co. contracted to build a b
ID: 2387156 • Letter: P
Question
Percentage-of-Completion Method:Dalton Construction Co. contracted to build a bridge for $10,000,000. Construction began in 2012 and was completed in 2013. Data relating to the construction are:
Costs incurred......................2012 - $3,300,000.....2011..............$2,750
Estimated costs to complete.....2012 - $2,700,000
A. How much revenue should be reported for 2012? Show your computations
B. Make the entry to record progress billings of $3,300,000 during 2012
C. Make the entry to record the revenue and gross profit for 2012
D. How much gross profit should be reported for 2013? Show your computations.
I need this by Saturday, February 4, 2012. Thank you.
Explanation / Answer
A. How much revenue should be reported for 2012?
=3,300,000 / 6,000,000 x 10,000,000=$5,500,000
=======================
B. Make the entry to record progress billings of $3,300,000 during 2012
Acounts receivable
3,300,000
Billing on construction process
3,300,000
=================
C. Make the entry to record the revenue and gross profit for 2012
construction expenses
3,300,000
construction in process
2,200,000
Revenue from long term contrac
5,500,000
============
D. How much gross profit should be reported for 2013? Show your computations.
Revenue
10,000,000
costs
6,050,000
Total gros profit
3,950,000
Recognised 2012
(2,200,000)
Recognised 2013
$ 1,750,000
Acounts receivable
3,300,000
Billing on construction process
3,300,000
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