Question: Reguired: Journal entries for long-term contract During the construction process, costs of construction are debited to Construction in Progress (CIP) account, an asset (like inventory)

Reguired: Journal entries for long-term contract During the construction process, costs of construction are debited to "Construction in Progress (CIP)" account, an asset (like inventory) account. 2019 2017 2018 2. Te record period billings during the progress: Period billings are credited to "Billings on Construction Contract", a contra asset account to the CIP. Note: this accounts reduces the book value of the physical asset (CIP) when a financial asset (Accounts Receivable) is also recognized; otherwise, the project would be double-counted on balance sheet 3. To record cash collections 4. To record revenue: Recognize the gross profit amount into the CIP account just to reflect Cost + Gross Profit = Revenue. S. Tement the cmatoict onody

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