Craft Construction entered into a contract to construct a generator station for a utility customer for $900,000 The project was started in 2016 and completed in 2017 Cost and other information is presented below 2016 2017 costs incurred during the year $225,000 $550,000 estimated cost to complete 450,000 0 billings during the year 200,000 700,000 cash collections during the year 150,000 750,000 (a) Prepare the required journal entries for 2016 and 2017, assuming that the percentage of completion method is used (b) What journal entries would change if the completed contract method was used

The Answer is in the image, click to view ...

Question: Craft Construction entered into a contract to construct a generator station for a utility customer for $900,000. The project was started in 2016 and completed

Craft Construction entered into a contract to construct a generator station for a utility customer for $900,000. The project was started in 2016 and completed in 2017. Cost and other information is presented below:

	2016	2017
costs incurred during the year	$225,000	$550,000
estimated cost to complete	450,000	0
billings during the year	200,000	700,000
cash collections during the year	150,000	750,000

(a) Prepare the required journal entries for 2016 and 2017, assuming that the percentage of completion method is used.

(b) What journal entries would change if the completed contract method was used?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Craft Construction entered into a contract to construct a generator station for a utility customer. The project was started in 2019 and completed in 2020. Cost and other information is presented...

Craft Construction Craft Construction entered into a contract to construct a generator station for a utility customer. The project was started in 2019 and completed in 2020. Cost and other...

5) Craft Construction entered into a contract to construct a generator station for a utility customer. The contract price is $900,000. The project was started in 2019 and completed in 2020. Assume...

compute the gross profit for BOTH 2019 AND 2020. 5) Craft Construction entered into a contract to construct a generator station for a utility customer. The contract price is $900,000. The project was...

SMU Construction entered into a contract to construct a generator station for a utility customer. The project was started in 2023 and completed in 2024. The total contract price is $900,000. Cost and...

SMU Construction entered into a contract to construct a generator station for a utility customer for a total price of $ 9 0 0 , 0 0 0 . The project was started in 2 0 1 9 and completed in 2 0 2 0 ....

Question 2 ( 2 4 marks ) SMU Construction entered into a contract to construct a generator station for a utility customer. The project was started in 2 0 2 3 and completed in 2 0 2 4 . The total...

Included in this folder you will find a power point presentation that outlines the basics of the new Revenue Recognition Standard. Included in these slides are specific examples that show you how the...

I need Answers for Exercise 18-4B, 18-8B, 15-15B, 18-21 B and 18-26B from the attached document Kieso, Intermediate Accounting, 2014 FASB Update, Chapter 18 EXERCISES: Set B 3 5 E18-1B (Sales with...

If someone is in the 28 percent marginal tax bracket, is that persons entire income taxed at 28 percent? Why or why not?

Go to the Web site www.independentsector.org/issues/accountability/Checklist/index.html. Read the various items listed in the checklist for accountability. Write a short report on the types of...

6. How is it possible for a nations consumption to sometimes exceed its disposable income?

1.Let A represent cat ownership and B represent dog ownership. Suppose 35% of households in a population own cats, 30% own dogs, and 15% own both a cat and a dog. Suppose you know that a household...

7-13 How can RFID technology simplify basic library processes like the lending and returns of books? RFID (Radio-frequency Identification) can play a key role in library management. The major...

7-9 BD sells medical devices and instrument systems to hospitals, health clinics, medical offices, and laboratories in over 50 countries. The company employs over 30,000 people around the world,...

7-12 In MyMISLab, you will find a Collaboration and Teamwork Project dealing with the concepts in this chapter. You will be able to use Google Drive, Google Docs, Google Sites, Google+, or other...