Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. you are constructing a building for a client who i

You are constructing a building for a client who is in control of the asset...

80.2K

Verified Solution

Question

Accounting

You are constructing a building for a client who is in control of the asset during the term of the contract. So as a brilliant accountant you already know, since the client controls the asset during the project, you need to use the percentage completion method to recognize revenue for this project. The contract is worth $10,847,600. Other items of interest Estimated Costs = $8,769,200

Actual costs for 2015 and 2016 were perfectly estimated

Someone underestimated costs for 2017 by $146,800

Year

Construction Costs ($)

Billing the customer ($)

2015

2,674,800

2,278,500

2016

4,458,000

4,854,200

2017

1,783,200

3,714,900

Now assume the client did not maintain control of the asset during construction.

Prepare the journal entries for revenue recognition for 2017 ONLY!

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students