Hamilton Construction Company uses the percentage-of-completion method of accounting. In 2020, Hamilton began work under a non-cancellable contract #E2-D2, which provided for a contract price of $2.2 million. Other details follow:

Instructions

a. How much revenue should be recognized in 2020? In 2021?

b. Assuming the same facts as those above except that Hamilton uses the completed-contract method of accounting, how much revenue should be recognized in 2021?

c. Prepare a complete set of journal entries for 2020 (using the percentage-of-completion method).

Transcribed Image Text:

2021 2020 Costs incurred during the year Estimated costs to complete, as at December 31 Billings during the year (non-refundable) Collections during the year $1,425,000 $640,000 960,000 420,000 350,000 -0- 1,680,000 1,500,000