Question

MakaGood Construction Corp.

B С D E F G H MakaGood Contruction Corp. MakaGood Construction Corp. agreed to construct the new Texas Stadium for $ 1,200,000 K. Originally construction costs were expected to be $ 925,000 K and the project was expected to take four years. The results for the construction project are as follows: 2016 2017 Actual costs incurred Anticipated cost to complete Current year billings Current year collections Actual costs incurred Anticipated cost to complete Current year billings Current year collections Actual costs incurred Anticipated cost to complete Current year billings Current year collections Actual costs incurred Anticipated cost to complete Current year billings Current year collections 120,250 804,750 300,000 285,000 386,750 468,000 300,000 290,000 333,000 210,000 300,000 310,000 250,000 2018 2019 300,000 310,000 Required a Calculate the amount of revenue recognized and pre-tax profit for the years 2016 thru 2019. Present the journal entries for 2019 b

please show work or formulas. thanks

Answer 1

		2016	2017	2018	2019
	Costs incurred to date	$120,250	$507,000	$840,000	$1,090,000
	Est. cost to complete	$804,750	$468,000	$210,000	$0
	Total estimated costs	$925,000	$975,000	$1,050,000	$1,090,000
	Contarct Price	$1,200,000	$1,200,000	$1,200,000	$1,200,000
	Expected gross profit	$275,000	$225,000	$150,000	$110,000	(Contract Price - total estimated cost)
	Percentage completed	13%	52%	80%	100%	Costs incurred to date / Est. total costs
		$35,750	$117,000	$120,000	$110,000	(Percentage competed x Expected gross profit)
	Less: Profit/Loss Recognized earlier year	$0	$35,750	$117,000	$120,000
	Gross Profit/(Loss) to recognize	$35,750	$81,250	$3,000	-$10,000
	Accounts Title	Debit	Credit
	Work in Progress	$250,000
	Accounts payable and others		$250,000
	Accounts Receivable	$300,000
	Billings		$300,000
	Cash	$310,000
	Accounts Receivable		$310,000
	Billings	$1,200,000
	Contruction Contracts Revenue		$1,200,000
	Cost of construction	$1,090,000
	Work in Progress		$1,090,000