In 2018, the Laguna Inc entered into a contract to construct a road for 5th Avenue for $14,000,000. The road was completed in 2018. Information related to the contract is as follows: Laguna uses the completed contract method of accounting for long-term construction contracts. Calculate the amount of gross profit to be recognized in each of the three years. Prepare all necessary journal entries for each of the years (credit various accounts for construction costs incurred). Prepare a partial balance sheet for 2016 and 2017 showing any items related to the contract.
In 2018, the Laguna Inc entered into a contract to construct a road for 5th Avenue for $14,000,000. The road was completed in 2018. Information related to the contract is as follows: Laguna uses the completed contract method of accounting for long-term construction contracts. Calculate the amount of gross profit to be recognized in each of the three years. Prepare all necessary journal entries for each of the years (credit various accounts for construction costs incurred). Prepare a partial balance sheet for 2016 and 2017 showing any items related to the contract.
Accounting (Text Only)
26th Edition
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter22: Budgeting
Section: Chapter Questions
Problem 22.22EX: Capital expenditures budget On January 1, 2016, the controller of Omicron Inc. is planning capital...
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In 2018, the Laguna Inc entered into a contract to construct a road for 5th Avenue for $14,000,000. The road was completed in 2018. Information related to the contract is as follows:
Laguna uses the completed contract method of accounting for long-term construction contracts.
- Calculate the amount of gross profit to be recognized in each of the three years.
- Prepare all necessary
journal entries for each of the years (credit various accounts for construction costs incurred). - Prepare a partial
balance sheet for 2016 and 2017 showing any items related to the contract.
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