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.