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How should the balances of progress billings and construction in progress be shown at reporting dates prior to the completion of a long-term contract?

A. Progress billings as deferred income, construction in progress as a deferred expense.

B. Progress billings as income, construction in progress as inventory.

C. Net, as a current asset if debit balance and current liability if credit balance.

D. Net, as gross profit from construction if credit balance, and loss from construction if debit balance.

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Question ajoutée par Utilisateur supprimé
Date de publication: 2015/02/27
Utilisateur supprimé
par Utilisateur supprimé

B. Progress billings as income and, construction in progress as inventory.

 

but to clarify:

 

Y1:

Dr. Construction in process

      Cr. Accounts payable 

 

Y1: then billings to contra account

 

Dr. Contracts receivable

       Cr.  Progress Billings 

 

Then to reflect the gross profit, revenues and expenses:

 

Dr.  Construction in progress

Dr.  Construction expense

       Cr.  Construction revenue

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