Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,760,000. The project was begun
Beavis Construction Company was the lowest bidder on a project to construct an earthen dam, with a total bid amount of $1,760,000. The project commenced in 2020 and was completed in 2021. Below is the relevant cost data for each year:
- 2020:
- Costs incurred during the year: $399,000
- Estimated costs to complete: $931,000
- Billings during the year: $485,000
-
Cash collections during the year: $385,000
-
2021:
- Costs incurred during the year: $1,060,000
- Estimated costs to complete: $0
- Billings during the year: $1,275,000
- Cash collections during the year: $1,375,000
Assuming that Beavis recognizes revenue for this contract over time based on the percentage of completion, please prepare all necessary journal entries to record the costs, billings, collections, and profit recognition. If no journal entry is required for a specific transaction or event, please indicate "No journal entry required" in the first account field.
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