question archive Gidget's Development Corp
Gidget's Development Corp
Subject:FinancePrice: Bought3
Gidget's Development Corp. (GDC) is a publicly reportable enterprise. Its year end is December 31. In 20X5, it entered into a $25 million, long-term contract to construct a small office complex. The company's management has determined that this is a single performance obligation settled over time and has elected to use the cost-to-cost input method to measure progress. Pertinent details of the construction progress follow:
(in '000s)
20X5
20X6*
20X7**
Costs incurred during the year
$ 7,000
$12,000
$ 6,500
Cumulative costs
7,000
19,000
25,500
Estimated costs to complete
13,000
7,000
0
Progress billing during the year
8,500
13,500
3,000
Collections during the year
6,900
12,600
5,500
*The revised cost data was not known before 20X6.
**The revised cost data was not known before 20X7.
Required:
a) Prepare all required summary journal entries for 20X5.
b) Prepare all required summary journal entries for 20X6.
c) Prepare all required summary journal entries for 20X7.
d) Summarize the accounts and amounts (excluding cash) that will be reported on GDC's statement of financial position as at December 31, 20X6, pertaining to this contract. Assume that all accounts payable have been paid
