Craft Construction
Craft Construction Entered into a Contract to Construct

question 75

Essay

Craft Construction
Craft Construction entered into a contract to construct a generator station for a utility customer. The project was started in 2016 and completed in 2017. Cost and other information is presented below.
$$\begin{array} { l r c } & \underline { 2016 } & \underline { 2017 } \\\text { Costs incurred during the year } & \$ 225,000 & \$ 550,000 \\\text { Estimated costs to complete } & 450,000 & - 0 - \\\text { Billings during the year } & 200,000 & 700,000 \\\text { Cash collections during the year } & 150,000 & 750,000\end{array}$$
-Refer to Craft Construction. Assume that Craft uses the completed-contract method for revenue recognition. Make the appropriate journal entries for 2016 and 2017 for Craft Company.

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Definitions:

No Further Deposits

A condition in financial agreements where an individual is not required or allowed to make additional contributions beyond the initial or specified amounts.

Deposited

Referring to money that has been placed into a financial account for safekeeping or savings.

Time-Value

Refers to the concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

Monetary Compensation

Payment provided to employees or workers in the form of money for their services or labor.