During 2004, IWMA (I will miss accounting) Company started a construction job with a contract price...

 

Transcribed Image Text:

During 2004, IWMA (I will miss accounting) Company started a construction job with a contract price of $4,500,000. The job was completed in October 2006. The following information is available. Data: Contract price: $4,500,000 Start date: July, 2004 Balance sheet date: Given: Costs to date Estimated cost: $4,000,000 Finish: October, 2006 st December 31 2004 $1,000,000 $3,000,000 Estimated costs to complete Progress billings during year $ 900,000 Cash collected during year $ 750,000 2005 $2,916,000 $1,134,000 $2,400,000 $1,750,000 2006 $4,050,000 $ -0- $1,200,000 $2,000,000 a) Using the percentage-of completion method, prepare a schedule to calculate the amount of revenue, gross profit to be recorded each year. b) Calculate the amount of gross profit to be recognized each year, assuming the completed-contact method. c) Record the necessary journal entries for the year 2005 under both the percentage-of completion method, and the completed-contact method. During 2004, IWMA (I will miss accounting) Company started a construction job with a contract price of $4,500,000. The job was completed in October 2006. The following information is available. Data: Contract price: $4,500,000 Start date: July, 2004 Balance sheet date: Given: Costs to date Estimated cost: $4,000,000 Finish: October, 2006 st December 31 2004 $1,000,000 $3,000,000 Estimated costs to complete Progress billings during year $ 900,000 Cash collected during year $ 750,000 2005 $2,916,000 $1,134,000 $2,400,000 $1,750,000 2006 $4,050,000 $ -0- $1,200,000 $2,000,000 a) Using the percentage-of completion method, prepare a schedule to calculate the amount of revenue, gross profit to be recorded each year. b) Calculate the amount of gross profit to be recognized each year, assuming the completed-contact method. c) Record the necessary journal entries for the year 2005 under both the percentage-of completion method, and the completed-contact method.