Construct pty ltd uses the percentage of completion method

Reference no: EM13576072

Accounting for construction contract:Construct Pty Ltd uses the percentage of completion method of accounting for construction contracts. In 2011 Construct Pty Ltd entered into a contract to build a commercial building with a contract price of $4,200,000 for Kairns Ltd. The details relating to the contract are as follows:

2011 2012$ $

Costs incurred during the year 300,000 2,750,000
Estimated costs to complete at 30 June 2,400,000 0
Billings during the year 720,000 3,480,000
Collections during the year 500,000 3,200,000

Required:

(a) Calculate the amount of profit to be recognised by Construct Pty Ltd for the two years.

(b) Prepare the general journal entries for both years, assuming the outcome of the contract can be reliably estimated.

Reference no: EM13576072

Questions Cloud

A history professor decides to give a 12-question : a history professor decides to give a 12-question true-false quiz. she wants to choose the passing grade such that the

Conceptual connection suppose that a third system system c : audiomart is a retailer of radios stereos and televisions. the store carries two portable sound systems that have

On 1 july anderson ltd require 70 of equity capital of : on 1 july anderson ltd require 70 of equity capital of arthur a cost of 4 millions at the date of acquisition all

On the previous page you will find a link titled learn more : from the homepage under the tab periodicals click on the internal auditor link. click on the about us link at the top

Construct pty ltd uses the percentage of completion method : accounting for construction contractconstruct pty ltd uses the percentage of completion method of accounting for

For the year just ended calculate the company has gross : a company reports the following account balances at year-endaccountbalancelong-term debt200000cash50000net

On january 1 2011 charles company exchanges 20000 shares of : the trial balances of charles company and its subsidiary letho inc. are as follows on december 31

On 31 december 2009 the directors of sydney ltd decided to : in the 30 june 2009 annual report of sydney ltd the equipment was reported as followsequipment 500000.accumulated

In sept of 2011 michelle sold shares of qualified small : in sept. of 2011 michelle sold shares of qualified small business stock for 1000000 that had a basis of 200000. she had

User Account

All Pages