Brief Exercise 18-24 Your answer is partially correct. Try again Teal Constructi

Question

Brief Exercise 18-24 Your answer is partially correct. Try again Teal Construction Company began work on a $423,000 construction contract in 2017. During 2017, Teal incurred costs of $276,700, billed its customer for $215,400, and collected $175,600. At December 31, 2017, the estimated additional costs to complete the project total $162,700 Prepare Teal's journal entry to record profit or loss, if any, using (a) the percentage-of-completion method and (b) the completed-contract method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit Credit (a Construction Expense 276700 onstruction in Proces 10327 evenue from Long-Term Contract 266373 No Entry No Entry

Explanation / Answer

Cost incurred till date        276,700 Estimated additional cost        162,700 Total Estimated Cost        439,400 Contract value        423,000 Estimated loss           16,400 Completed Percentage 276700/439400 Completed Percentage 62.97% Revenue which can be reognized 423000*62.97%        266,373 Cost incurred till date        276,700 Loss realized         (10,327) Loss unrealized           (6,073) Situation A Loss realized   Dr           10,327 Loss Unrealized Dr             6,073      To WIP      10,327      To Profit & Loss        6,073 (Being loss recognized) Situation B Loss Unrealized Dr           16,400      To Profit & Loss      16,400 (Being loss recognized)

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