Question - The Daytona Company is involved in a three-year long-term contract. The following data relate to this contract:
2010 2011 2012 Total
Contract price $160,000
Cost incurred each year $24,000 $24,000 $ 56,000 104,000
Cost incurred to date 24,000 48,000 104,000
Estimated cost to complete 96,000 48,000 0
Partial billings each year 12,000 48,000 100,000
Cash collected from billings 8,000 52,000 100,000
Prepare the journal entries to reflect the percentage-of-completion method for 2011:
a. Construction costs for the year.
b. Partial billings.
c. Cash collections.