Beavis Construction Company was the low bidder on a construction project to buil
ID: 2537572 • Letter: B
Question
Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,760,000. The project was begun in 2015 and completed in 2016. Cost and other data are presented below:
Required information
Assume that Beavis recognizes revenue on this contract over time according to percentage of completion.
13.Required information
Assume that Beavis recognizes revenue on this contract over time according to percentage of completion.
Prepare all journal entries to record costs, billings, collections, and profit recognition. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
14.Required information
Assume that Beavis recognizes revenue upon completion of the project.
Compute the amount of gross profit recognized during 2015 and 2016.
15.Required information
Assume that Beavis recognizes revenue upon completion of the project.
Prepare all journal entries to record costs, billings, collections, and profit recognition.
Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,760,000. The project was begun in 2015 and completed in 2016. Cost and other data are presented below:
Explanation / Answer
ans1) the amount of gross profit recognized during 2015 and 2016.
2015
Contract price $ 1760000
Actual costs to date $ 399000
Estimated costs to complete 931000
Total estimated project costs 1330000
Estimated total gross proft 430000
Percentage oF completion:
$399000/1330000 30%
Gross proft recognized $129000
2016:
Contract price $1,760000
Costs incurred:2015 $399000
2016 1,060,000
Total cost 1,459,000
Total gross proft 301000
Recognized in 2015 129000
Recognized in 2016 $172,000
ans2) all journal entries to record costs, billings, collections, and profit recognition.
2015:
Construction in progress 399000
Cash or A/P 399000
Accounts receivable 485000
Billings on construction contract 485000
Cash 385000
Accounts receivable 385000
Construction in progress 129000
Cost of construction 399000
Revenue from long-term contracts 528000
2016:
Construction in progress 1,060,000
Cash or A/P 1,060,000
Accounts receivable 1,330,000
Billings on construction receivable 1,330,000
Cash 1430000
Account REceivables 1430000
Construction in progress 172000
Cost of construction 1060000
Revenuefrom long-term contracts 1232000
Billings on construction contract 1760000
Construction in progress 1760000
ans3) mount of gross profit recognized during 2015 and 2016.
2015:$0
2016:
Contract price 1760000
Costs incurred:
2015 399000
2016 1060000
Total cost 1459000
Total gross profit 301000
ans4) all entries to record costs, billings, collections, and profit recognition.
2015:
Construction in progress 399000
Cash or A/P 399000
Accounts receivable 485000
Billings on construction contract 485000
Cash 385000
Accounts receivable 385000
2016:
Construction in progress 1060000
Cash or A/P 1060000
Accounts receivable 1330000
Billings on construction contract 1330000
Cash 1430000
Accounts receivable 1430000
Construction in progress 301000
Cost of construction 1459000
Revenue from long-term contracts 1760000
Billings on construction contract 1760000
Construction in progress 1760000
ans1) the amount of gross profit recognized during 2015 and 2016.
2015
Contract price $ 1760000
Actual costs to date $ 399000
Estimated costs to complete 931000
Total estimated project costs 1330000
Estimated total gross proft 430000
Percentage oF completion:
$399000/1330000 30%
Gross proft recognized $129000
2016:
Contract price $1,760000
Costs incurred:2015 $399000
2016 1,060,000
Total cost 1,459,000
Total gross proft 301000
Recognized in 2015 129000
Recognized in 2016 $172,000
ans2) all journal entries to record costs, billings, collections, and profit recognition.
2015:
Construction in progress 399000
Cash or A/P 399000
Accounts receivable 485000
Billings on construction contract 485000
Cash 385000
Accounts receivable 385000
Construction in progress 129000
Cost of construction 399000
Revenue from long-term contracts 528000
2016:
Construction in progress 1,060,000
Cash or A/P 1,060,000
Accounts receivable 1,330,000
Billings on construction receivable 1,330,000
Cash 1430000
Account REceivables 1430000
Construction in progress 172000
Cost of construction 1060000
Revenuefrom long-term contracts 1232000
Billings on construction contract 1760000
Construction in progress 1760000
ans3) mount of gross profit recognized during 2015 and 2016.
2015:$0
2016:
Contract price 1760000
Costs incurred:
2015 399000
2016 1060000
Total cost 1459000
Total gross profit 301000
ans4) all entries to record costs, billings, collections, and profit recognition.
2015:
Construction in progress 399000
Cash or A/P 399000
Accounts receivable 485000
Billings on construction contract 485000
Cash 385000
Accounts receivable 385000
2016:
Construction in progress 1060000
Cash or A/P 1060000
Accounts receivable 1330000
Billings on construction contract 1330000
Cash 1430000
Accounts receivable 1430000
Construction in progress 301000
Cost of construction 1459000
Revenue from long-term contracts 1760000
Billings on construction contract 1760000
Construction in progress 1760000