Foc Wildhorse Construction Inc., which has a calendar year end, has entered into a non-cancellable fixed-price contract for $2.6 millionbeginning September 1, 2023, to build a road for a municipality. It has been estimated that the road construction will be complete byJune 2025. The following data pertain to the construction period.Costs to dateEstimated costs to completeProgress billings to date (non-refundable)Cash collected to date.2023$736.0001,564,000796.000636,0002024$1,634,000516,0002.132.0002,007,0002025$2,182,00002.600,0002,600,000 Using the percentage-of-completion method, prepare the journal entries for 2024. (Use Materials, Cash, Payables for costsincurred to date.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry isrequired, select "No Entry for the account titles and enter 0 for the amounts. List all debit entries before credit entries.)Account Titles and ExplanationContract Asset/LiabilityMaterials, Cash, Payables(To record cost of construction)Accounts ReceivableContract Asset/Liability(To record progress billings)CashAccounts Receivable(To record collections)Contract Asset/LiabilityRevenue from Long-Term Contracts(To record revenues)Construction ExpensesContract Asset/Liability(To record construction expenses)Debit16340002132000200700013480001634000Credit00 0016340002132000200700013480001634000

Journal entry records the accounting transactions of a business in a journal book. All the business…

Wildhorse Construction Inc., which has a calendar year end, has entered into a non-cancellable fixed-price contract for $2.6 million beginning September 1, 2023, to build a road for a municipality. It has been estimated that the road construction will be complete by June 2025. The following data pertain to the construction period.

Wildhorse Construction Inc., which has a calendar year end, has entered into a non-cancellable fixed-price contract for $2.6 million beginning September 1, 2023, to build a road for a municipality. It has been estimated that the road construction will be complete by June 2025. The following data pertain to the construction period.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter3: Income Sources

Section: Chapter Questions

Problem 88P

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