Question: During 2017, Martinez Company started a construction job with a contract price of $1,580,000. The job was completed in 2019. The following information is available.
|
2017
|
2018
|
2019
|
|
Costs incurred to date
|
$404,000
|
$853,160
|
$1,073,000
|
|
Estimated costs to complete
|
606,000
|
254,840
|
-0-
|
|
Billings to date
|
301,000
|
904,000
|
1,580,000
|
|
Collections to date
|
271,000
|
812,000
|
1,418,000
|
Instructions: Complete a chart analyzing the above information showing revenue, the % of completion every year and the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
Prepare all necessary journal entries for 2018.
Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used.