Prepare all journal entries required for bridgeport corp

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In 2019, Bridgeport Corp. was awarded a contract to build a bridge in a suburb of Montreal at a total contract price of $10,000,000. When the contract was signed, the estimated total costs to complete the project were $8,000,000 and this number has not changed. 20% of the revenue on the contract (or $2,000,000) was already recognized in 2019 based on the percent complete at December 31, 2019. The company follows IFRS and uses the percentage-of-completion method using the cost-to-cost basis for all such contracts.

The following information relates to the year ending December 31, 2020:

  • Bridgeport incurred construction costs of $4,800,000 during the year.
  • The customer was billed for non-refundable progress billings of $2,200,000.
  • Bridgeport collected $150,000 in cash on progress billings during the year.

Required:

Problem 1: Prepare all journal entries required for Bridgeport Corp. for the year ending December 31, 2020 relating to this contract.

Reference no: EM132695230

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