(a) Open Show Work SHOW LIST OF ACCOUNTS SHOW SOLUTION SHOW ANSWER LINK TO TEXT
ID: 2450104 • Letter: #
Question
(a)
Open Show Work
SHOW LIST OF ACCOUNTS
SHOW SOLUTION
SHOW ANSWER
LINK TO TEXT
(b)
Account Titles and Explanation
Debit
Credit
(To record costs of construction)
(To record progress billings)
(To record collections)
(To recognize revenue and gross profit)
During 2014, Nilsen Company started a construction job with a contract price of $1,968,000. The job was completed in 2016. The following information is available.2014 2015 2016 Costs incurred to date $492,000 $1,014,750 $1,316,100 Estimated costs to complete 738,000 338,250 –0– Billings to date 369,000 1,107,000 1,968,000 Collections to date 332,100 996,300 1,752,750
Explanation / Answer
Percentage of Completion Method Estimated Revenues 2014 2015 2016 Total Costs 492,000 522,750 301,350 1,316,100 % of Completion 37.38 39.72 22.90 100 Cummulative 37.38 77.10 100.00 Revenue 735,638 781,682 450,617 1,968,000 Income Statement 2014 2015 2016 Total Revenues 735,638 781,682 450,617 1968000 Expenses 492,000 522,750 301,350 1,316,100 Net Income 243,638 258,932 149,267 651,837 Journal Entry For 2015 Construction in Process Dr. 522750 To Cash A/c 522750 (To record cost of construction) Accounts Receivables A/c Dr. 738000 To Billing on Construction in Progress 738000 (to record progress billing) Cash A/c Dr. 664,200 To Accounts Receivables A/c 664,200 (to record collections) Construction in Progress A/c Dr. 258932 Construction Expenses A/c Dr. 522750 To Revenue from Long Term Contract 781682 (To recognised revenue)
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