Question

Guillen, Inc. began work on a \(7,000,000 contract in 2017 to construct an office building. Guillen uses the completed-contract method. At December 31, 2017, the balances in certain accounts were Construction in Process \)1,715,000, Accounts Receivable \(240,000, and Billings on Construction in Process \)1,000,000. Indicate how these accounts would be reported in Guillen’s December 31, 2017, balance sheet.

Short answer

Costs in excess of billings is $715,000

Step-by-step solution

Meaning of Balance Sheet

Balance sheet is one of the three fundamentalfinancial statements used to analyze a corporation. It shows the financial position of the company as of the publishing date. It shows the assets, liabilities, and funds of shareholders of the company.

Balance Sheet December 31, 2017, of Guillen Inc.

Current Assets:	Amount ($)	Total Amount ($)
Accounts Receivables	240,000	240,000
Inventories
Construction in Process	1,715,000
Less: Billings	(1,000,000)
Costs in excess of billings	715,000	715,000
Total:		955,000