Parcell Company contracted on 4/1/07 to construct a building for $2,500,000. The project was completed in 2005. Additional data follow:
2007 2008 2009
Costs incurred to date $ 560,000 $1,350,000 $1,900,000
Estimated cost to complete 1,040,000 450,000 -
Billings to date 500,000 2,000,000 2,500,000
Collections to date 400,000 1,300,000 2,400,000
Instructions
(a) Calculate the income recognized by Parcell under the percentage-of-completion method of accounting in each of the years 2007, 2008, and 2009.
(b) Prepare all necessary entries for the year 2008.
(c) Present the balance sheet disclosures at December 31, 2008. Proper headings or subheadings must be indicated.