Magnum Construction contracted to construct a factory building for $545,000.The company started during 2012 and was completed in 2013.Information relating to the contract is as follows:
$\begin{array} { | l | c | c | }
\hline & \mathbf { 2 0 1 2 } & \mathbf { 2 0 1 3 } \
\hline \text { Costs incured during the year } & \mathbf { 3 1 0 , 0 0 0 } & \mathbf { 1 7 0 , 0 0 0 } \
\hline \text { Estinated additional cost to complete } & 165,000 & \cdots \
\hline \text { Billings during the year } & 280,000 & 285,000 \
\hline \text { Cash collections during the year } & 260,000 & 305,000 \
\hline
\end{array}$
Required:
Record the preceding transactions in Magnum's books under completed-contract and the percentage of completion methods.Determine amounts that will be reported on the balance sheet at the end of 2012.

Question

Magnum Construction contracted to construct a factory building for $545,000.The company started during 2012 and was completed in 2013.Information relating to the contract is as follows:
 $\begin{array} { | l | c | c | } 
\hline & \mathbf { 2 0 1 2 } & \mathbf { 2 0 1 3 } \
\hline \text { Costs incured during the year } & \mathbf { 3 1 0 , 0 0 0 } & \mathbf { 1 7 0 , 0 0 0 } \
\hline \text { Estinated additional cost to complete } & 165,000 & \cdots \
\hline \text { Billings during the year } & 280,000 & 285,000 \
\hline \text { Cash collections during the year } & 260,000 & 305,000 \
\hline
\end{array}$ 
Required:
Record the preceding transactions in Magnum's books under completed-contract and the percentage of completion methods.Determine amounts that will be reported on the balance sheet at the end of 2012.

Quizplus · Accepted Answer

The Answer of Magnum Construction contracted to construct a factory building for $545,000.The company started during 2012 and was completed in 2013.Information relating to the contract is as follows:
 $\begin{array} { | l | c | c | } 
\hline & \mathbf { 2 0 1 2 } & \mathbf { 2 0 1 3 } \
\hline \text { Costs incured during the year } & \mathbf { 3 1 0 , 0 0 0 } & \mathbf { 1 7 0 , 0 0 0 } \
\hline \text { Estinated additional cost to complete } & 165,000 & \cdots \
\hline \text { Billings during the year } & 280,000 & 285,000 \
\hline \text { Cash collections during the year } & 260,000 & 305,000 \
\hline
\end{array}$ 
Required:
Record the preceding transactions in Magnum's books under completed-contract and the percentage of completion methods.Determine amounts that will be reported on the balance sheet at the end of 2012.

Magnum Construction Contracted to Construct a Factory Building for $545,000