Solution-Compute in proper format amount of gross profit

Compute in proper format amount of gross profit recognized

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Reference no: EM133041756

Question - McDonald Construction Company was the low bidder on a construction project to build an earthen dam for $1,800,000. The project began in 2020 and completed in 2021. Cost and other data are presented below:

	2020	2021
Costs incurred during the year	$450,000	$1,100,000
Estimated costs to complete	1,050,000	0
Billings during the year	400,000	1,400,000
Cash collections during the year	300,000	1,500,000

Assume that McDonald recognizes revenue on this contract over time according to percentage of completion.

Required -

1. Compute in proper format the amount of gross profit recognized during 2020 and 2021?

2. Prepare ONLY the 2020 journal entries to record costs, billings, collections, and profit recognition.

Reference no: EM133041756

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Compute in proper format amount of gross profit recognized

Reference no: EM133041756

Reference no: EM133041756

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