Hamilton Construction Company uses the percentage-of-completion method of accounting. In 2022, Hamilton began work under contract #E2-D2, which provided for a contract price of $2,200,000. Other details follow:

Instructions

a. What portion of the total contract price would be recognized as revenue in 2022? In 2023?

b. Assuming the same facts as those above except that Hamilton uses the cost recovery method of accounting, what amount of the total contract price would be recognized as revenue in 2023?

c. Prepare a complete set of journal entries for 2022 using the percentage-of completion method.

Transcribed Image Text:

2022 2023 Costs incurred during the year $640,000 $1,425,000 Estimated costs to complete, as of December 31 960,000 -0- Billings during the year Collections during the year 420,000 1,680,000 350,000 1,500,000