Pinetree Builders has the following data for its Rolling Hills Construction Proj
ID: 2602576 • Letter: P
Question
Pinetree Builders has the following data for its Rolling Hills Construction Project. The contract price of the project is $18,000,000. Complete the following table with the required information using the percentage of completion method.
2016
2017
2018
Costs incurred to date
$4,500,000
$10,500,000
$15,500,000
Estimated costs to complete
10,500,000
2,625,000
Billings during the year
6,600,000
8,400,000
3,000,000
Cash collections during the year
6,000,000
6,000,000
6,000,000
Estimated total costs
Estimated total profit
Percentage of Completion
Revenue Recognized in each year
Profit recognized in each year
Current Asset
Current Liabilities
Required
1. Enter the appropriate amounts in the blank cells above.
2. Prepare the required journal entries for 2016, 2017 and 2018. Omit explanations.
2016
2017
2018
Costs incurred to date
$4,500,000
$10,500,000
$15,500,000
Estimated costs to complete
10,500,000
2,625,000
Billings during the year
6,600,000
8,400,000
3,000,000
Cash collections during the year
6,000,000
6,000,000
6,000,000
Estimated total costs
Estimated total profit
Percentage of Completion
Revenue Recognized in each year
Profit recognized in each year
Current Asset
Current Liabilities
Explanation / Answer
Answer 1 Answer 2 2016 2017 2018 Journal Entries Cost incurred to date $4,500,000 $10,500,000 $15,500,000 Year Account Titles Debit Credit Estimated cost to complete $10,500,000 $2,625,000 2016 Construction in progress $4,500,000 Billing during the year $6,600,000 $8,400,000 $3,000,000 Accounts Payable (or cash) $4,500,000 Cash collection during the year $6,000,000 $6,000,000 $6,000,000 Estimated total cost $15,000,000 $13,125,000 $15,500,000 Contract Receivable $6,600,000 Estimated Total Profit $3,000,000 $4,875,000 $2,500,000 Progress Billings $6,600,000 Percentage of Completion 30% 80% 100% Revenue Recognised in each year $5,400,000 $9,000,000 $3,600,000 Cash $6,000,000 Profit recognised in each year $900,000 $3,000,000 -$1,400,000 Contract Receivable $6,000,000 Current assets $2,100,000 $4,500,000 $2,500,000 Current Liabilities $0 Construction in progress $900,000 Construction Expenses $4,500,000 Construction Revenue $5,400,000 2017 Construction in progress $6,000,000 Accounts Payable (or cash) $6,000,000 Contract Receivable $8,400,000 Progress Billings $8,400,000 Cash $6,000,000 Contract Receivable $6,000,000 Construction in progress $3,000,000 Construction Expenses $6,000,000 Construction Revenue $9,000,000 2018 Construction in progress $5,000,000 Accounts Payable (or cash) $5,000,000 Contract Receivable $3,000,000 Progress Billings $3,000,000 Cash $6,000,000 Contract Receivable $6,000,000 Construction Expenses $5,000,000 Construction Revenue $3,600,000 Construction in progress $1,400,000 Construction in progress $2,500,000 Retained Earnings $2,500,000