The White Company uses the completed-contract method of accounting for construction and has the following data relating to a 3-year project:
|
19A
|
19B
|
19C
|
Total
|
|
Construction costs
|
$50,000
|
$25,000
|
$35,000
|
$110,000
|
|
Billings
|
50,000
|
25,000
|
25,000
|
100,000
|
|
Collections
|
50,000
|
50,000
|
30,000
|
30,000
|
|
Estimated completion
|
|
|
|
|
|
costs as of year-end
|
40,000
|
35,000
|
-
|
-
|
The contract price is $100,000.
In 19B the company realized it would incur a $10,000 loss, as follows:
|
Costs so far
|
$ 75,000
|
|
Estimated remaining costs
|
35,000
|
|
Estimated total costs
|
$110,000
|
|
Selling price
|
100,000
|
|
Loss
|
$ 10,000
|
Prepare the journal entries for all 3 years.