At the end of 20X2 Bob the Builder had incurred costs of $2.5 million out of a total cost of construction estimated at $5 million.The fixed contract price is $7.5 million.Using the percentage of completion method provide the journal entries to record these transactions.Progress claims to date total $800 000.

Question

Quizplus · Accepted Answer

The percentage of completion method recognizes revenue and expenses based on the percentage of completion of the project. In this case, the project is 50% complete (2.5 million incurred costs / 5 million total estimated costs). Therefore, the journal entry to record the transactions would be:Dr. Construction expenses $2,500,000Dr. Construction in progress $1,000,000Cr. Construction revenues $3,500,000

At the End of 20X2 Bob the Builder Had Incurred A) Dr. Construction expenses $2500000\begin{array} { l l } \text { A) Dr. Construction expenses } & \$ 2500000 \end{array} A) Dr. Construction expenses ​$2500000​

At the End of 20X2 Bob the Builder Had Incurred $\begin{array} { l l } \text { A) Dr. Construction expenses } & \$ 2500000 \end{array}$