Pharoah, Inc. began work on a $6,909,000 contract in 2025 to construct an office building. During 2025, Pharoah, Inc. incurred costs of $1,791,800, billed its customers for $1,174,000, and collected $1,035,000. At December 31, 2025, the estimated additional costs to complete the project total $3,478,200. Prepare Pharoah's 2025 journal entries using the percentage-of-completion method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For costs incurred use account Materials, Cash, Payables. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Construction in Process Materials, Cash, Payables (To record costs incurred.) Accounts Receivable Billings on Construction in Process (To record billings.) cash Accounts Receivable (To record collections.) Construction in Process Construction Expenses Revenue from Long-Term Contracts (To recognize revenue.) Debit 1791800 1174000 1035000 1791800 Credit 1791800 ]]]] 1174000 1035000
Pharoah, Inc. began work on a $6,909,000 contract in 2025 to construct an office building. During 2025, Pharoah, Inc. incurred costs of $1,791,800, billed its customers for $1,174,000, and collected $1,035,000. At December 31, 2025, the estimated additional costs to complete the project total $3,478,200. Prepare Pharoah's 2025 journal entries using the percentage-of-completion method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For costs incurred use account Materials, Cash, Payables. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Construction in Process Materials, Cash, Payables (To record costs incurred.) Accounts Receivable Billings on Construction in Process (To record billings.) cash Accounts Receivable (To record collections.) Construction in Process Construction Expenses Revenue from Long-Term Contracts (To recognize revenue.) Debit 1791800 1174000 1035000 1791800 Credit 1791800 ]]]] 1174000 1035000
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 40P
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Transcribed Image Text:Pharoah, Inc. began work on a $6,909,000 contract in 2025 to construct an office building. During 2025, Pharoah, Inc. incurred costs
of $1,791,800, billed its customers for $1,174,000, and collected $1,035,000. At December 31, 2025, the estimated additional costs to
complete the project total $3,478,200.
Prepare Pharoah's 2025 journal entries using the percentage-of-completion method. (Credit account titles are automatically indented
when amount is entered. Do not indent manually. For costs incurred use account Materials, Cash, Payables. If no entry is required, select "No
entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.)
Account Titles and Explanation
Construction in Process
Materials, Cash, Payables
(To record costs incurred.)
Accounts Receivable
Billings on Construction in Process
(To record billings.)
cash
Accounts Receivable
(To record collections.)
Construction in Process
Construction Expenses
Revenue from Long-Term Contracts
(To recognize revenue.)
Debit
1791800
1111
1174000
1035000
1791800
Credit
1791800
OTO WW NO
1174000
1035000
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