(Answered) Question - parcell company contracted on 4107 to construct

Accounting

Question - Parcell Company contracted on 4/1/07 to construct a building for $2,500,000. The project was completed in 2005. Additional data follow:

2007 2008 2009

Costs incurred to date $ 560,000 $1,350,000 $1,900,000

Estimated cost to complete 1,040,000 450,000 -

Billings to date 500,000 2,000,000 2,500,000

Collections to date 400,000 1,300,000 2,400,000

Instructions

(a) Calculate the income recognized by Parcell under the percentage-of-completion method of accounting in each of the years 2007, 2008, and 2009.

(b) Prepare all necessary entries for the year 2008.

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