Accounting Analysis I: The Role of Accounting as an Information System | Online Course Support

Company X started progress on a long-term construction project at the beginning of 2017 for a contract price of $10 million. Company X estimates that the project will take four years to complete, and it will be working on the project over this period of time. Billings are made each year as listed in the table below.

 

 

Debit

Credit

Amount

Cash

Construction in progress

$0.50M

 

 

Debit

Credit

Amount

Cash

Billings on construction contract

$2.00M

 

Debit

Credit

Amount

Cash

Accounts Receivable

$2.00M

 

Debit

Credit

Amount

Accounts Receivable

Billings on construction contract

$2.50M

 
 

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