Percentage-of-completion method. Apple Contractors, an 80%- owned subsidiary, is constructing a warehouse for its parent, Plum Corporation. The following information is available on December 31, 20X1:
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Percent of completion .
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60%
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Costs incurred to date .
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$120,000
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Estimated costs to complete .
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80,000
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Contract price .
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250,000
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Amount billed to date (no amounts collected)
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150,000
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Apple uses the percentage-of-completion method to account for its long-term contracts.
Record the journal entries that each of the two companies would have made relative to the construction. Prepare a partial trial balance using the data from your entries, and show the eliminations relating to the contract for the December 31, 20X1, consolidated worksheet.