You have just started work as the controller for SomeBig Co., a construction company. The 20X0fiscal year ended October 31, 20X0 and your predecessor left a few things undone. Mostimportantly, the company started a project constructing an office building for SCR Engineeringduring the year and there have been no year-end entries made to record any revenues or expensesassociated with the project.Your assistant, Sally, has summarized the entries made during fiscal year 20X0 and 20X1 for youas follows:Year20X0Year20X1Construction in process inventory12,500,0004,500,000Cash12,500,0004,500,000Note: to record costs incurred on SCR building contractAccounts receivable12,200,0005,800,000Billings on contract12,200,0005,800,000Note: to record progress billings on SCR building contractCash10,000,0008,000,000Accounts Receivable10,000,0008,000,00Note: to record collections on SCR building contractSally also has given you the information summarized below:• Total contract price = $18,000,000Original total estimated costs at the beginning of the project= $17,400,000• Revised total estimated costs as of October 24, 20x0 = $17,000,000• Start date: February 1, 20X0• Estimated completion date: February 1, 20X1Required: (round dollar amounts to whole dollars, round percentages to 2 decimal places: 23.45%)1) Under revenue recognition over time, what is the percentage of completion to date by the endof year 20X0?Percentage of completion to date (in %): 512) Under revenue recognition over time, what is the 20X0 year-end adjusting journal entry (youmust indicate "no entry required" if that is the case)?ABсNoDateAccount Title1112/31/20X0construction in process2cost of construction3revenue from long term contractDEDebitCredit-3,320,000 ×12,500,000 ×9,180,0003) Under revenue recognition over time, what is the 20×1 year-end adjusting journal entry (youmust indicate "no entry required" if that is the case)?ABсNoDateAccount Title1112/31/20X1construction in process2cost of construction3revenue from long term contractDEDebitCredit4,320,000 ×4,500,0008,820,000

The percentage of completion method in construction costing, reports the revenues and expenditure on…

Required: (round dollar amounts to whole dollars, round percentages to 2 decimal places: 23.45%) 1) Under revenue recognition over time, what is the percentage of completion to date by the end of year 20X0? Percentage of completion to date (in %): 51 2) Under revenue recognition over time, what is the 20X0 year-end adjusting journal entry (you must indicate "no entry required" if that is the case)? A ☐ B No Date 1 1 12/31/20X0 2 3 Account Title construction in process cost of construction revenue from long term contract D E Debit Credit -3,320,000 12,500,000 9,180,000 3) Under revenue recognition over time, what is the 20X1 year-end adjusting journal entry (you must indicate "no entry required" if that is the case)?

Required: (round dollar amounts to whole dollars, round percentages to 2 decimal places: 23.45%) 1) Under revenue recognition over time, what is the percentage of completion to date by the end of year 20X0? Percentage of completion to date (in %): 51 2) Under revenue recognition over time, what is the 20X0 year-end adjusting journal entry (you must indicate "no entry required" if that is the case)? A ☐ B No Date 1 1 12/31/20X0 2 3 Account Title construction in process cost of construction revenue from long term contract D E Debit Credit -3,320,000 12,500,000 9,180,000 3) Under revenue recognition over time, what is the 20X1 year-end adjusting journal entry (you must indicate "no entry required" if that is the case)?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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