Question - In 2010 Rodney Construction Company agreed to price of $1,200,000. The information relating to the cost and billing for this contract is shown below:
2010. 2011. 2012
Cost incurred to date. $280,000. $600,000. $785,000
Estimated costs yet to be incurred. 520,000. 200,000. 0
Customer billings to date. 150,000. 500,000. 1,200,000
Collection of billing yo date. 120,000. 320,000. 940,000
Instructions
1. Assuming that the percentage-of-completion method is used. Compute the amount of gross profit to be recognized in 2010 and 2011.
2. Prepare journal entries for 2011.