Answer:
2021: revenue 3,000,000
gross profit 510,000
2022: revenue 4,800,000
gross profit 816,000
2023: revenue 2,200,000
gross profit 374,000
2022 journal entries:
construction in progress 3,984,000 debit
various account 3,984,000 credit
--to record cost incurred--
account receivables 4,444,000 debit
unearned revenue 4,444,000 credit
--to record billed amount
cash 3,900,000 debit
account receivables 3,900,000 credit
--to record cash collection--
unearned revenue 4,800,000 debit
construction revenue 4,800,000 credit
---to record earned revenue according to
percentage of completion method---
Explanation:
2021:
incurred 2,490,000
total cost estimated:
2,490,000 + 5,810,000 = 8,300,000
<u><em>percentage:</em></u> 2,490,000 / 8,300,000 = 30%
revenue 10,000,000 x 30% = 3,000,000
cost 2,490,000
gross profit 510,000
2022:
incurred 3,984,000
total cost: 2,490,000 + 3,984,000 + 1,826,000 = 8,300,000
<em><u>percentage: </u></em>3,984,000 / 8,300,000 = 48%
revenue 10,000,000 x 48% = 4,800,000
cost <u> 3,984,000</u>
gross profit 816,000
2023:
completed:
remaining revenue: 100% - 48% - 30% = 22%
10,000,000 x 22% = 2,200,000
cost incurred 1,826,000
gross profit 374,000
