February 1, 2010, Ohio Contractors agreed to construct a building at a contract price of $6,000,000. Ohio estimated total construction costs would be $4,000,000 and the project would be finished in 2012. Fiscal year ended 31 Dec. Information relating to the costs and billings for this contract is as follows:

23 0

Get full Expert solution in seconds

$1.97 ONLY

Unlock Answer

 February 1, 2010, Ohio Contractors agreed to construct a building at a contract price
of $6,000,000. Ohio estimated total construction costs would be $4,000,000 and the
project would be finished in 2012. Fiscal year ended 31 Dec. Information relating to the
costs and billings for this contract is as follows:
2010 2011 2012
Variation to the contract price-increase $200,000
Total costs incurred to date $1,500,000 $2,640,000 4,600,000
Estimated costs to complete 2,500,000 1,760,000 -0-
Customer billings to date 2,200,000 4,000,000 5,600,000
Collections to date 2,000,000 3,500,000 5,500,000
Required:
a. Calculate the percentage of completion for 2010, 2011 and 2012. (5
marks)
b. Prepare journal entries for the years ended 31 Dec 2010, 2011 (10
marks)
c. Prepare extract of statements of comprehensive income for each of
the three years. (8 marks)
d. Prepare extracts of statements of financial position for each of the
three years. (7 marks)

EXPERT ANSWER