Using the information provided in RE18 3 prepare the journal entries
Using the information provided in RE18-3, prepare the journal entries to record Year 1’s
(a) Construction costs,
(b) Partial billings,
(c) Cash collections,
(d) Gross profit.
In RE18-3, Clorad Corporation uses the percentage-of-completion method of accounting for construction contracts. Using the following information for Year 1, compute Clorad’s
Year 1 (of four-year project):_____________________________________
Construction costs incurred during the year ......... $ 174,000
Estimated costs to complete the contract .......... 426,000
Partial billings to customers ................ 100,000
Collections from customers ................ 25,000
Total contract price .................. 1,000,000

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