Using the information provided in RE18 3, prepare the journal entries to record Year 1's
(a) Construction costs,
(b) Partial billings,
(c) Cash collections,
(d) Gross profit
In RE18 3, Clorad Corporation uses the percentage of completion method of accounting for construction contracts. Using the following information for Year 1, compute Clorad's
Year 1 (of four year project):_____________________________________
Construction costs incurred during the year ......... $ 174,000
Estimated costs to complete the contract .......... 426,000
Partial billings to customers ................ 100,000
Collections from customers ................ 25,000
Total contract price .................. 1,000,000