Question - Chicago contractors got $7,000,000 contract to construct a school building for the City of Chicago. Work on this contract began in 2013 and the financial data pertaining to this contract is available here.
Cost incurred till Dec.31, 2013 $1,400,000
Billings made to City $2,000,000
Amount collected from City $ 1,500,000
The estimated future cost to complete this contract is $4,200,000.
(a) Prepare Chicago contractors 2013 journal entries using percentage of completion method.
(b) Show how the contract accounts will appear in the Balance Sheet of Chicago Contractors on 12/31/2013.