Sunland Construction Company has entered into a non-cancellable contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $625,000 and will take three years to construct. The complexwill be billed to the purchasing company at $930,000. The following data pertain to the construction period. 2022 $468,750 $635,000 2020 2021 Costs to date $281,250 Estimated costs to complete 343,750 156,250 Progress billings to date (non-refundable) 281,250 575,000 930,000 Cash collected to date 251,250 525,000 930,000

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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.