Assume the facts given in BE6.33 for Darwin Corporation. Assume billings for the construction contract were as
Question:
Assume the facts given in BE6.33 for Darwin Corporation. Assume billings for the construction contract were as follows: 2020, $500,000; 2021, $2 million; and 2022, $1.7 million. Calculate the balance of the Contract Asset/Liability account at the end of each year using
(a) The percentage-of completion method
(b) The zero-profit and completed-contract methods.
BE6.33
During 2020, Darwin Corporation started a construction job with a contract price of $4.2 million. Darwin ran into severe technical difficulties during construction but managed to complete the job in 2022. The contract is non-cancellable. Under the terms of the contract, Darwin sends billings as revenues are earned. Billings are non refundable. The following information is available:
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
a Balance in Contract AssetLiability account Percentageof completion method Costs 2020 600000 Bi...View the full answer
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
