Business, 24.07.2020 23:01 shyra94

Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,800,000. The project was begun in 2020 and completed in 2021. Cost and other data are presented below: 2020 2021

Costs incurred during the year $450,000 $1,100,000
Estimated costs to complete 1,050,000 0
Billings during the year 400,000 1,400,000
Cash collections during the year 300,000 1,500,000

Assume that Beavis recognizes revenue on this contract over time according to percentage of completion.

Required:

a. Compute the amount of gross profit recognized during 2020 and 2021.
b. Assume that Beavis recognizes revenue upon completion of the project. Required: Compute the amount of gross profit recognized during 2020 and 2021. (6 points)
c. Assume that Beavis recognizes revenue on this contract over time according to percentage of completion. Required: Prepare all journal entries to record costs, billings, collections, and profit recognition.

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Beavis Construction Company was the low bidder on a construction project to build an earthen dam for...

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