Question 2 During 2014, Antoinette started a construction job with a contract pr

Question

Question 2 During 2014, Antoinette started a construction job with a contract price of $2.8 million. The job was completed in 2016 and information for the three years of construction is as follows: 2014 2015 2016 Costs incurred to date $1,230,000 $1,765,000 $1,965,000 Estimated costs to complete 850,000 175,000 –0– Billings to date 1,000,000 1,880,000 2,800,000 Collections to date 710,000 1,720,000 2,800,000 Under the earnings approach: * Question 2 Correct answer. Your answer is correct. Calculate the amount of gross profit / (loss) that should be recognized each year under the percentage-of-completion method. (Round percent complete to 2 decimal places, e.g. 52.75%. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Gross Profit / (Loss) for 2014 $Entry field with correct answer 425769 Gross Profit / (Loss) for 2015 $Entry field with correct answer 356653 Gross Profit / (Loss) for 2016 $Entry field with correct answer 52577 Attempts: 3 of 4 used * Question 2 Prepare all necessary journal entries for 2014, 2015, and 2016, including closing the contract accounts upon comple tion of the contract, assuming the percentage-of-completion method is used. (Credit account titles are automatically indented when the 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.) Year Account Titles and Explanation Debit Credit 2014 (To record the cost of construction) 2014 (To record progress billings) 2014 (To record cash collections) 2014 (To record revenue and gross profit / (loss)) Year Account Titles and Explanation Debit Credit 2015 (To record the cost of construction) 2015 (To record progress billings) 2015 (To record cash collections) 2015 (To record revenue and gross profit / (loss)) Year Account Titles and Explanation Debit Credit 2016 (To record the cost of construction) 2016 (To record progress billings) 2016 (To record cash collections) 2016 (To record revenue and gross profit / (loss)) 2016 (To record completion of the contract) Attempts: 0 of 4 used * Question 2 The parts of this question must be completed in order. This part will be available when you complete the part above. * Question 2 The parts of this question must be completed in order. This part will be available when you complete the part above.

Explanation / Answer

Answer Contract Price 2800000 Year 2014 2015 2016 Billing to date 1000000 1880000 2800000 Cost incurred to date 1230000 1765000 1965000 Estimated Cost to compelete 850000 175000 0 Collection to date 710000 1720000 2800000 Amount of Gross profit/Loss 425769 356653 52577 2014 2015 2016 Debit Credit Debit Credit Debit Credit 1 Cost of Construction Construcion in process 1230000 535000 200000 Miscellanous 1230000 535000 200000 * miscellaniuns means materaial labour etc 2 Progress Billing Account Receivable 1000000 880000 920000 Billing on costruction 1000000 880000 920000 3 Cash Collection Cash 710000 1010000 1080000 Account Receivable 710000 1010000 1080000 4 Record revenue and gross profit/loss Construction in process 425769 356653 52577 Income from construction 425769 356653 52577 5 Record the completion of contract Billing on Construction 2800000 Construction in process 2800000

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