Completed Contract Method
On March 1, 2008, bids were submitted for a construction project to build a new municipal building and fire station. The lowest bid was $4,270,000, submitted by the Harper Construction Company. Harper was awarded the contract. Harper uses the completed contract method to report gross profit. The following data are given to summarize the activities on this contract for 2008 and 2009. Give the entries to record these transactions using the completed contract method.
|
|
Cost |
Estimated Cost |
Billings on |
Collections of |
|
Year |
Incurred |
to Complete |
Contract |
Billings |
|
2008 |
$1,790,000 |
$2,140,000 |
$1,750,000 |
$1,050,000 |
|
2009 |
2,090,000 |
0 |
2,520,000 |
3,220,000 |