Please help me with the wrong answer (indicated as the red mark) – Thanks! It’s not 100000 or 97000 or 103000 I have tried them… How to calculate the Billings on Construction in Process?
The board of directors of Ogle Construction Company is meeting to choose between the completed- contract method and the percentage-of-completion method of accounting for long-term contracts in the company’s financial statements. You have been engaged to assist Ogle’s controller in the preparation of a presentation to be given at the board meeting. The controller provides you with the following information: 1. Ogle commenced doing business on January 1, 2018. 2. Construction activities for the year ended December 31, 2018, were as follows: Estimated Additional Costs Total Contract Price Billings Through 12/31/18 Cash Collections Througlh 12/31/18 Contract Costs Incurred Through 12/31/18 Complete Contracts Project $ 334,000 204,000 469,000 94,000 394,000 $1,495,000 $ 418,000 186,000 344,000 117,000 314,000 $1,379,000 $ 95,000 434,000 $ 494,000 714,000 472,000 197,000 444,000 $2,321,000 串304,000 204,000 384,000 62,000 394,000 $1,348,000 0 91,000 78,500 $698,500 3. Each contract is with a different customer. 4. Any work remaining to be done on the contracts is expected to be completed in 2019. Your answer is correct Compute the amount of income (or loss) before selling, general, and administrative expenses for the year ended December 31, 2018, which would be reported under: (1) The completed-contract method. (2) The percentage-of-completion method (based on estimated costs). 98000 167400
Expert Answer
Journal entry for progress billings: | |||||||
Year | Particulars | Debit | Credit | ||||
2018 | Contract receivable | 94000 | |||||
Billing on construction in process | 94000 | ||||||
This is the only entry reflected in Billing on construction in process for the year 2018 | |||||||
Hence.Balance on billing on construction in process as on Dec 31,2018=$94000 |