Pearland Construction Company (PCC) entered into a contract to build a parking complex. The project will commence on January 1, 2017. The complex will cost. Approximately $600,000 and will take 3 years to complete construction. PCC will bill its client $900,000 for the construction. The following information contain data for the construction description 2017 2018 2019 costs to date $270,000 $450,000 $610,000 estimated costs to complete 330,000 150,000 0 progress billings to date 270,000 550,000 900,000 cash collected to date 240,000 500,000 900,000

Requirements:

a. Using the percentage-of-completion method, compute the estimated gross profit that would be recognized by PCC during each year (2017, 2018, and 2019) of the construction.

b. prepare all necessary journal entries for each year of the construction.

Answer rating: 100% (QA)

a Contract 600 000 Billings 900 000 Estimated costs 330 000 Progress billings 270 000 Cash collected ... View the full answer