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Question: During 2017, Martinez Company started a construction job with a contract price of $1,580,000. The job was completed in 2019. The following information is available.
2017
2018
2019
Costs incurred to date
$404,000
$853,160
$1,073,000
Estimated costs to complete
606,000
254,840
-0-
Billings to date
301,000
904,000
1,580,000
Collections to date
271,000
812,000
1,418,000
Instructions: Complete a chart analyzing the above information showing revenue, the % of completion every year and the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
Prepare all necessary journal entries for 2018.
Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used.
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