Ex. 18-109—Journal entries—percentage-of-completion.

Grant Construction Company was awarded a contract to construct an interchange at the junction of U.S. 94 and Highway 30 at a total contract price of $8,000,000. The estimated total costs to complete the project were $6,000,000.


(a)Make the entry to record construction costs of $3,600,000, on construction in process to date.

(b)Make the entry to record progress billings of $2,000,000.

(c)Make the entry to recognize the profit that can be recognized to date, on a percentage-ofcompletion basis.

Ex. 18-110—Percentage-of-completion method.

Garnet Construction Co. contracted to build a bridge for $5,000,000. Construction began in 2007 and was completed in 2008. Data relating to the construction are:

2007       2008

Costs incurred $1,650,000 $1,375,000

Estimated costs to complete 1,350,000 —

Garnet uses the percentage-of-completion method.


(a)How much revenue should be reported for 2007?  Show your computation.

(b)Make the entry to record progress billings of $1,650,000 during 2007.

(c)Make the entry to record the revenue and gross profit for 2007.

(d)How much gross profit should be reported for 2008?  Show your computation.



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