Reference no: EM131624686
Problem - Crockett Construction Company contracted to build a stadium that will take 3 years to complete. Crockett has agreed to a contract price of $21,000,000, estimated total contract costs of $1,500,000, and expects a gross profit of $6,000,000. The table below shows information related to the contract.
2017 2018 2019
Construction costs incurred during the year $3,000,000 $5,580,000 $9,420,000
Estimated costs to complete the contract 12,000,000 7,920,000 0
Partial billings to customer 2,400,000 10,500,000 8,100,000
Collections from customer 1,500,000 9,900,000 9,600,000
Total contract price, $21,000,000
Requirements:
1. Prepare a gross profit table for the entire contract period, assuming the contract meets the criteria for revenue recognition over time.
2. Prepare journal entries related to the contract for years 2017-2019.
3. Prepare income statements for each year of the contract period.
4. Prepare balance sheets related to the contract for 2017 and 2018.
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