【文章內(nèi)容簡介】 mates. 823 In January 2020, Strong Construction Company was awarded a contract with a total price of $3,000,000. Strong expects to earn $400,000 profit on the contract. The construction was pleted over a 3year period. The table shown next provides the actual cost that Strong experienced and the pletion rate. Measuring the Percentage of Completion 824 Measuring the Percentage of Completion 825 Accounting for LongTerm Construction Contracts Continuing with the Strong Construction Company illustration, the direct and indirect costs, billings, and collections are as follows: 826 CompletedContract Method Construction in Progress 1,040,000 Materials, Cash, etc. 1,040,000 To record costs incurred. Accounts Receivable 1,000,000 Progress Billings on Construction Contracts 1,000,000 To record billings. Cash 800,000 Accounts Receivable 800,000 To record cash collections. 2020 (continues) 827 Construction in Progress 910,000 Materials, Cash, etc. 910,000 To record costs incurred. Accounts Receivable 900,000 Progress Billings on Construction Contracts 900,000 To record billings. Cash 850,000 Accounts Receivable 850,000 To record cash collections. 2020 CompletedContract Method (continues) 828 Construction in Progress 650,000 Materials, Cash, etc. 650,000 To record costs incurred. Accounts Receivable 1,100,000 Progress Billings on Construction Contracts 1,100,000 To record billings. Cash 1,350,000 Accounts Receivable 1,350,000 To record cash collections. 2020 CompletedContract Method 829 PercentageofCompletion Method ? The entries we recorded using the pletedcontract method are also the same entries that would be used for the percentageofpletion method. ? The pletedcontract method is “wrapped up” using the entries shown in Slides 30 and 31. The percentageofpletion method requires the entries presented in Slides 32 to 34. 830 2020 Under the pletedcontract method, the following entries would be made to recognize revenue and costs and to close out the inventory and billing accounts. Progress Billings on Construction Contracts 3,000,000 Revenue from LongTerm Construction Contracts 3,000,000 (continues) CompletedContract Method 831 2020 Under the pletedcontract method, the following entries would be made to recognize revenue and costs and to close out the inventory and billing accounts. Cost of LongTerm Construction Contracts 2,600,000 Construction in Process 2,600,000 CompletedContract Method 832 PercentageofCompletion Cost of LongTerm Construction Contracts 1,040,000 Construction in Progress 160,000 Revenue from LongTerm Construction Contracts 1,200,000 2020 (continues) Under the percentageofpletion method, the following additional entries would be made to recognize revenue. 833 Cost of LongTerm Construction Contracts 910,000 Construction in Progress 140,000 Revenue from LongTerm Construction Contracts 1,050,000 2020 ($3,000,000 ? ) ? $1,200,000 PercentageofCompletion (continues) 834 Cost of LongTerm Construction Contracts 650,000 Construction in Pr