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Deck Contractors Inc

question 12

Essay

Deck Contractors Inc.(DC)enters into a contract to construct six decks adjacent to a commercial building.The purchaser has agreed to pay $8,500 for each deck (total $51,000).The terms of the contract call for a 40% deposit ($3,400 per deck)at time of contract signing and payment of the balance ($5,100 per deck)as each deck is completed.
The contract is signed on October 1,2014.Two decks are completed in 2014 and the balance in 2015.DC has a December 31 year-end.The cost to DC of constructing each deck is $3,400,which it pays in cash.
Requirements:
a.Prepare summary journal entries for 2014 and 2015.
b.What is the balance in the deferred revenue account as at December 31,2014?


Definitions:

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