ACCOUNTING
Edwards Company contracted on 4/1/10 to construct a building for $2,500,000. The project was completed in 2012. Additional data follow:
2010 2011 2012
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 Edwards under the percentage-of-completion method of accounting in each of the years 2010, 2011, and 2012.
(b) Prepare all necessary entries for the year 2011.
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