On May 1, 2020, Teal Inc. entered into a contract to deliver one of its specialty mowers to Kickapoo Landscaping Co. The contract requires Kickapoo to pay the contract price of $990 in advance on May 15, 2020. Kickapoo pays Teal on May 15, 2020, and Teal delivers the mower (with cost of $648) on May 31, 2020.(a) Prepare the journal entry on May 1, 2020, for Teal. (b) Prepare the journal entry on May 15, 2020, for Teal. (c) Prepare the journal entry on May 31, 2020, for Teal.

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Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.