Percentage-Of-Completion Method Finch Construction Corp

question 118

Essay

Percentage-of-completion method Finch Construction Corp.contracted to build a bridge for $5,000,000.Construction began in 2014 and was completed in 2015.Data relating to the construction are: Revenue Recognition 6 - 31 Instructions Using the percentage-of-completion method and the cost-to-cost basis,
a)How much revenue should be reported for 2014? Show your calculation.
b)Prepare the journal entry to record progress billings of $1,700,000 during 2014.
c)Prepare the journal entry to record the revenue and gross profit for 2014.
d)How much gross profit should be reported for 2015? Show your calculation.

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