Basic Construction Journal Entries
Refer to Practice 8 8. In addition to the percentage of completion information, the following information is available regarding billing and cash collection for the project:
|
Year 1 |
Year 2 |
Year 3 |
|
|
Progress billings |
$200,000 |
$200,000 |
$400,000 |
|
Cash collections |
180,000 |
170,000 |
450,000 |
Make the journal entries necessary to record the construction cost, the progress billings, and the cash collections in (1) Year 1, (2) Year 2, and (3) Year 3.
Practice 8 8
Cost to Cost Method
The company signed an $800,000 contract to build an environmentally friendly access trail to South Willow Lake. The project was expected to take approximately three years. The following information was collected for each year of the project—Year 1, Year 2, and Year 3:
|
|
Cost |
Expected |
Support |
Additional |
Trail Feet |
Additional |
|
|
Expended |
Additional |
Timbers |
Support |
Constructed |
Trail Feet |
|
|
during |
Cost to |
Laid during |
Timbers |
during |
to Be |
|
|
the Year |
Completion |
the Year |
to Be Laid |
the Year |
Constructed |
|
Year 1 |
$100,000 |
$450,000 |
150 |
850 |
3,000 |
15,200 |
|
Year 2 |
150,000 |
280,000 |
300 |
520 |
7,500 |
8,200 |
|
Year 3 |
250,000 |
0 |
500 |
0 |
8,000 |
0 |