Zeus construction company agreed to construct

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Reference no: EM13942396

In 2012, Zeus Construction Company agreed to construct an apartment building at a price of $1,200,000. The information related to the billing for this contract is shown below:

	2012	2013	2014
Costs incurred to date (cumulative costs)	$480,000	$800,000	$1,250,000
Estimated costs to complete	520,000	450,000	0
Billings to date (cumulative billings)	150,000	500,000	1,200,000
Collections to date (cumulative collections)	120,000	320,000	940,000

A) Record journal entries for 2013.

B) Determine gross profit to be recognized in each year if the company uses:

	Percentage of Completion	Completed Contract
2012 Gross Profit
2013 Gross Profit
2014 Gross Profit

C) Determine the whether Zeus will report a liability or asset in relation to its construction project as well as accounts receivable balances (remember to express values net of any related contra accounts):

	Asset (Liability) Balance of Construction Project	Accounts Receivable
12/31/12
12/31/13
12/31/14

Reference no: EM13942396

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