Reference no: EM132641463

Problem - Make Journal Entry to Record Periodic Income

Queens Construction Company commences construction of a harbour on 1 July 2020. It signs a fixed-price contract for total revenue of $400 million. The project is expected to be completed by the end of June 2023. The expected cost at the commencement of construction was $300 million. The expected costs to complete a construction project can change throughout the project. The following data relates to the project:

	2021 ($M)	2022 ($M)	2023 ($M)
Costs for the year	90	110	120
Costs incurred to date	90	200	320
Estimated costs to complete	210	120	-
Progress billings during the year	100	120	180
Cash collected during the year	90	130	180

The contract is completed as expected on 30 June 2023. Queens Construction Company uses the percentage-of-completion method to account for its construction contract.

REQUIRED - Provide the numbers for the journal entries below. Assume the stage of completion can be reliably determined. Round the percentage complete (%) to one decimal place (i.e, 0.0%) if necessary. Complete the six blanks below.

Journal entry to record periodic income recognised:

	2021 ($M)	2022 ($M)	2023 ($M)
Dr. Construction in process
Dr. Construction expenses
Cr. Revenue from long- term contract