On June 15. 2018, Sanderson Construction entered into a long-term construction c

Question

On June 15. 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C.. for $220 million. The expected completion date is April 1.2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year end for the life of the contract are as follows (S in millions): Costs incuired duting the year Estimated costs to complete as of December 31 2018 540 120 2019 $80 60 2020 $50 TASK: Please - make the journal entries to record Sanderson Construction activity for 2019 TIPI >show C-I-P T-account LP 208 GP 20l9 GP CASH

Explanation / Answer

Date Account Title and Explanation Debit (in millions) Credit (in millions) 2019 Construction in Progress $80 Cash $80 (Being Expenses incurred) 2019 Contruction in progress $66.67 Construction Expense $80 Construction Revenue 146.67* (Being revenue recorded) *($40 + $80)/($40 + $80 + $60)

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