question archive Hart Construction which has a calendar year end, has entered into a non-cancellable fixed priced contract of $7,500,000 beginning January 1, 2018 to build a parking complex
Hart Construction which has a calendar year end, has entered into a non-cancellable fixed priced contract of $7,500,000 beginning January 1, 2018 to build a parking complex
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Hart Construction which has a calendar year end, has entered into a non-cancellable fixed priced contract of $7,500,000 beginning January 1, 2018 to build a parking complex. It has been estimated that the parking complex will be complete by September 30, 2020. The following data pertains to the construction period: 2018 $ 3,200,000 $ 3,300,000 $ 2,700,000 Costs during the year Estimated costs to complete Progress Billings 2019 $ 2,700,000 $ 1,000,000 $ 2,750,000 2020 $ 1,700,000 $0 $ 2,050,000 Required: A) Determine the revenue and profit/loss that should be recorded on this contract in 2019. Prepare the journal entry B) What is the balance in the CIP and the billings accounts by the end of 2019? How will they be presented in the balance sheet? C) Prepare the journal entries to record the revenue and profit/loss in 2020. D) Assume the company cannot measure its progress and has to use the completed contact method. Prepare the journal entries.
