Question

in 5 percentage of completion KSON HAS THE FOLLOWING INFORMATION PERTAINING TO A LONG TERM PROJECT 10)COUNTED FOR UNDER THE PERCENTAGE OF COMPLETION METHOD: CONTRACT PRICE 2015 COSTS TO DATE 2015 ESTIMATED REMAINING COSTS 2016 COSTS TO DATE 2016 ESTIMATED REMAINING COSTS 2017 COSTS TO DATE PROJECT COMPLETED IN 2017 620,000 140.000 260,000 313.500 104,500 418,000 REQUIRED: PREPARE JOURNAL ENTRY 4 FOR THE FIRST TWO YEARS OF THE PROJECT (2015 AND 2016) (10 POINTS) 2015 : grosse prostit, na CP 6620,000 400 GOU Cults-Die 14 Est lasts 2641600 2 ol 220/ou 0,35 . Cross Prompt, 2010 77000 consration Progreen, Matenals, per (Ash, Air Biling, cunsation لي هه وا و لا
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Answer 1

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Jackson								2015			2016
Calculation of Gross Profit						Ans to 2a and 2b	Journal Entries	Debit $	Credit $		Debit $	Credit $
Particulars	2015	2016	2017			Costs Incurred	CIP (Work-in-progress)	140,000			173,500
Contract Price	620,000	620,000	620,000	A			Cash		140,000			173,500
Cost Incurred to date	140,000	313,500	418,000	B
Cost Incurred during the year	140,000	173,500	104,500	C
(Cost incurred to date of the current year less Cost incurred to date of the previous year)						Period end adjustments for Revenue	Construction Expense	140,000			173,500
Estimated cost to complete	260,000	104,500	-	D		(Gross Profit entry)	CIP (Work-in-progress)	77,000			74,500
Estimated total cost	400,000	418,000	418,000	E=B+D			Construction Revenue		217,000			248,000
Percentage complete	35.00%	75.00%	100.00%	F=B/E
(Cost Incurred to date/Estimated total cost)
Revenue to be recognized	217,000	248,000	155,000	G
(Contract Price*Percentage complete)- revenue previously recognized
Year 2015: 35% completed. Revenue recognized = 35% x $ 620,000 = $ 217,000.
Year 2016: 75% completed. Revenue recognized = 75% x $ 620,000 – $ 217,000 (previously recognized) = $ 248,000.
Year 2017: 100% completed. Revenue recognized = 100% x $ 620,000 – $ 217,000- $ 248,000 (previously recognized) = $ 155,000.
Gross Profit/(Loss)	77,000	74,500	50,500	H=G-C