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SBB Construction built a building for BBB during 2019 and 2020. Relevant data are summarized below:...

SBB Construction built a building for BBB during 2019 and 2020. Relevant data are summarized below:

Contract amount $ 2,550,000
Cost: 2019 1,100,000
2020 500,000
Gross profit: 2019 650,000
2020 300,000
Contract billings: 2019 1,275,000
2020 1,275,000


SBB recognizes revenue upon completion of the contract. Assume that the company bills in the exact amount of the contract (i.e. the sum of contract billings = the total contract price).

What is the journal entry in 2020 to record revenue?

  • Accounts receivable 1,275,000
    Revenue from long-term contracts 1,275,000
  • Construction in progress 950,000
    Cost of construction 1,600,000
    Revenue from long-term contracts 2,550,000
  • Cost of construction 1,750,000
    Gross profit 800,000
    Revenue from long-term contracts 2,550,000
  • Construction in progress 300,000
    Cost of construction 500,000
    Revenue from long-term contracts 800,000
Business   Accounting   
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