In 2012, Gurney Construction Company agreed to construct an apartment building at a price of $1,200,000. The information relating to the costs and billings for this contract is shown below.
|
2012 |
2013 |
2014 |
| Costs incurred to date |
$280,000 |
$600,000 |
$ ?785,000 |
| Estimated costs yet to be incurred |
520,000 |
200,000 |
–0– |
| Customer billings to date |
150,000 |
500,000 |
1,200,000 |
| Collection of billings to date |
120,000 |
320,000 |
940,000 |
|
|
Instructions
| (a) |
Assuming that the percentage of completion method is used, (1) compute the amount of gross profit to be recognized in 2012 and 2013, and (2) prepare journal entries for 2013. |
| (b) |
For 2013, show how the details related to this construction contract would be disclosed on the balance sheet and on the i |
