The Puff and Stuff Company is involved in a three-year long-term contract. The following data relate to this contract: 2016 2017 2018 Total Contract Price $ 200,000 Costs incurred each year $ 24,000 $ 56,000 $ 30,000 $ 110,000 Costs incurred to date $ 24,000 $ 80,000 $ 110,000 Estimated cost to complete $ 96,000 $ 40,000 $ - Partial billings each year $ 50,000 $ 112,000 $ 38,000 Cash collected from billings $ 35,000 $ 120,000 $ 45,000 Required: Prepare the journal entries for each of the following assuming Puff and Stuff satisfies its performance obligation. 2016 Entries a. Construction costs for the year b. Partial billings c. Cash collections d. Gross Profit 2017 Entries a. Construction costs for the year b. Partial billings c. Cash collections d. Gross Profit 2018 Entries a. Construction costs for the year b. Partial billings c. Cash collections d. Gross Profit and closing of construction accounts
The Puff and Stuff Company is involved in a three-year long-term contract. The following data relate to this contract: 2016 2017 2018 Total Contract Price $ 200,000 Costs incurred each year $ 24,000 $ 56,000 $ 30,000 $ 110,000 Costs incurred to date $ 24,000 $ 80,000 $ 110,000 Estimated cost to complete $ 96,000 $ 40,000 $ - Partial billings each year $ 50,000 $ 112,000 $ 38,000 Cash collected from billings $ 35,000 $ 120,000 $ 45,000 Required: Prepare the journal entries for each of the following assuming Puff and Stuff satisfies its performance obligation. 2016 Entries a. Construction costs for the year b. Partial billings c. Cash collections d. Gross Profit 2017 Entries a. Construction costs for the year b. Partial billings c. Cash collections d. Gross Profit 2018 Entries a. Construction costs for the year b. Partial billings c. Cash collections d. Gross Profit and closing of construction accounts
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
| The Puff and Stuff Company is involved in a three-year long-term contract. The following data relate to this contract: | ||||||||
| 2016 | 2017 | 2018 | Total | |||||
| Contract Price | $ 200,000 | |||||||
| Costs incurred each year | $ 24,000 | $ 56,000 | $ 30,000 | $ 110,000 | ||||
| Costs incurred to date | $ 24,000 | $ 80,000 | $ 110,000 | |||||
| Estimated cost to complete | $ 96,000 | $ 40,000 | $ - | |||||
| Partial billings each year | $ 50,000 | $ 112,000 | $ 38,000 | |||||
| Cash collected from billings | $ 35,000 | $ 120,000 | $ 45,000 | |||||
| Required: | ||||||||
| Prepare the |
||||||||
| 2016 Entries | ||||||||
| a. Construction costs for the year | ||||||||
| b. Partial billings | ||||||||
| c. Cash collections | ||||||||
| d. Gross Profit | ||||||||
| 2017 Entries | ||||||||
| a. Construction costs for the year | ||||||||
| b. Partial billings | ||||||||
| c. Cash collections | ||||||||
| d. Gross Profit | ||||||||
| 2018 Entries | ||||||||
| a. Construction costs for the year | ||||||||
| b. Partial billings | ||||||||
| c. Cash collections | ||||||||
| d. Gross Profit and closing of construction accounts | ||||||||
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