Beavis Construction Company Was the Low Bidder on a Construction

question 153

Essay

Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,800,000. The project was begun in 2017 and completed in 2018. Cost and other data are presented below:

-Assume that Beavis recognizes revenue upon completion of the project.
Required:
Prepare all journal entries to record costs, billings, collections, and profit recognition.

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Definitions:

Temporal Method

An accounting technique for converting the financial statements of a subsidiary in a foreign currency into the parent company's reporting currency.

Retained Earnings

Profits that a company retains at the end of a fiscal period, which are not distributed to shareholders as dividends but are reinvested in the business.

Remeasured

The process of adjusting the book value of a foreign currency transaction on the financial statements to reflect the current exchange rate.

Depreciation Expense

An accounting method used to allocate the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.