On June 1, 2019, Al-Bader Construction Company contracted to construct a building for Nass Company, for...

   

Transcribed Image Text:

On June 1, 2019, Al-Bader Construction Company contracted to construct a building for Nass Company, for a total contract price of $12,000,000. The project was to be completed by October 31, 2021 The annual costs incurred, estimated costs to complete the contract, billings to Nass and collections for 2019, 2020, and 2021 are given below 2020 2021 2019 54.320,000 Costs incurred to date: $7,005,000 $10,050,000 Estimated costs to complete 5,250,000 3,285,000 10 Bings to date 4,800,000 10,050,000 12,600,000 Collections to dato 3,000,000 8,250,000 9,750,000 Instructions: If Al Bader Company uses the percentage-of-completion method; 1. Compute the amount of gross profit or loss to be recognized each year 2. Prepare all necessary journal entries for 2020 3. Prepare the journal entry to record the completion of the contract in 2021, 4 Prepare partial statement of financial position at December 31, 2019 5. If Al-Bader Company uses the cost-recovery method, prepare the necessary journal entry to recognize any gross profit in 2021. On June 1, 2019, Al-Bader Construction Company contracted to construct a building for Nass Company, for a total contract price of $12,000,000. The project was to be completed by October 31, 2021 The annual costs incurred, estimated costs to complete the contract, billings to Nass and collections for 2019, 2020, and 2021 are given below 2020 2021 2019 54.320,000 Costs incurred to date: $7,005,000 $10,050,000 Estimated costs to complete 5,250,000 3,285,000 10 Bings to date 4,800,000 10,050,000 12,600,000 Collections to dato 3,000,000 8,250,000 9,750,000 Instructions: If Al Bader Company uses the percentage-of-completion method; 1. Compute the amount of gross profit or loss to be recognized each year 2. Prepare all necessary journal entries for 2020 3. Prepare the journal entry to record the completion of the contract in 2021, 4 Prepare partial statement of financial position at December 31, 2019 5. If Al-Bader Company uses the cost-recovery method, prepare the necessary journal entry to recognize any gross profit in 2021.

Answer rating: 100% (QA)

Step 1 You have posted multiplepart questions so only the first three subparts are answered If any o... View the full answer