Coquel Company Has a Non-Cancellable Contract to Construct a Bridge

question 43

Essay

Coquel Company has a non-cancellable contract to construct a bridge for an estimated cost of $ 1,950,000. The contract is to start in July 2020, and the bridge is to be completed in September 2022. The following data pertain to the construction period. Assume that progress billings are non-refundable.
$\begin{array}{c}\begin{array}{lll}\\\text {Costs to date}\\\text {Estimated costs to complete}\\\text {Progress billings during theyear}\\\text {Cash collected during the year}\end{array}\begin{array}{r}2020\\\hline\$ 360,000 \\1,260,000 \\305,00\\280.000\end{array}\begin{array}{r}2021\\\hline \$ 900,000 \\380,000\\765,000\\760.000\end{array}\begin{array}{r}2022\\\hline\$ 390,000\\-\\ 1,200,000 \\ 2,000,000 \end{array}\end{array}$
Instructions
a) Assuming that Coquel Company uses the completed-contract method prepare the appropriate journal entries.
b) Assuming that Coquel Company uses the zero-profit method prepare the appropriate journal entries to recognize revenue over the life of the contract.

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Definitions:

Pitch Deck

A presentation composed of slides that is used to convince potential investors or partners about the value and potential of a business idea or venture.

TAM (Total Available Market)

Refers to the total market demand for a product or service, representing the maximum amount of revenue a business can potentially generate by selling their product or service in a specific market.

SAM (Serviceable Available Market)

Refers to the segment of the TAM (Total Available Market) that your product or service can reach and serve.

SOM (Share Of Market)

The percentage of an industry or market's total sales that is earned by a particular company over a specified time period.