Percent-of-Completion Method
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Sherman Construction Company was awarded a contract to construct an interchange at the junction of U.S. 66 and Highway 40 at a total contract price of $8,000,000. The estimated total costs to complete the project the were $6,000,000.
a. Make the entry to record construction costs of $3,600,000, on construction in process to date.
b. Make the entry to record progress billing of $2,000,000.
c. Make the entry to recognize the profit that can be recognized to date, on a percentage-of-completion basis.
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Solution Summary
Different journal entries were made for a project under Sherman Construction Company.
Solution Preview
Contract revenue $8,000,000
Costs incurred during the year $3,600,000
Estimated costs to complete $2,400,000
Total estimated contract costs $6,000,000
Estimated profits ...
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