Khodra Construction had a contract starting April 2021, to construct a $9,000,000 highway that is expected to be completed in September 2023, at an estimated cost of $8,250,000.  At the end of 2021, the costs to date were $3,795,000 and the estimated total costs to complete had not changed. The progress billings during 2021 were $1,800,000 and the cash collected during 2021 was 1,200,000. What amount of Construction in Process  should Khodra Construction have reported  at December 31, 2021?

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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.