[Solved] Poseidon Corporation,based in Greece,specializes in Painting Cargo Ships

Question 247

Poseidon Corporation,based in Greece,specializes in painting cargo ships.On December 1,2016 Poseidon received $300,000 in advance from Worldwide Shipping,Inc.to paint a 40,000-ton cargo vessel.The painting process is scheduled to begin on December 1,2016,and the ship is to be returned to Worldwide in four months.Worldwide retains legal title to the ship during the contract period,and can sell the ship to another shipper during the contract period if it so chooses.
Required: Assuming Poseidon uses "proportion of time" as its measure of progress toward completion,prepare any journal entry that Poseidon would record:
(1)at inception of the contract
(2)at the end of 2016 to recognize all revenue associated with this contract that should be recognized in 2016.Ignore any costs associated with providing the painting service.

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