Streamline Your Progress Billing for Construction Sample for Nonprofit with airSlate SignNow

Progress billing for construction sample for Nonprofit

welcome back to another lesson in this lesson we're going to cover the journal entry to record Whip and its impact on the balance sheet and income statement what we have in front of us is a balance sheet and income statement always want to make sure that your balance sheet balances your assets equal your total liabilities and members equity which they do so we're good to go in this example suppose we have no under Billings recorded and we have no over Billings so we'll call these the unadjusted balances zero we have contract revenue of 442,000 that's the unadjusted amount as well suppose after calculating whip which you'll know how to calculate since you watched the previous video we have 20 ,000 in under Billings over Billings we have 40,000 okay so we went from zero to 20,000 considering that this is an asset account an increase is a debit so we'll come to our journal entry here positives represent debits negatives represent credits we have a $20,000 debit to under Billings over Billings went from 0 to 40,000 that's an increase so the credit increase this is a Formula here under over Revenue 20,000 to balance the J entry this total zero revenue is the offset account to the difference between the over Billings and under Billings so let's go back to our sample financial statements balance sheet under Billings of 20,000 as we just discussed over Billings of 40,000 we had 442,000 in contract revenues unadjusted now we're at 422 decrease of 20,000 a debit to revenue is a decrease since credit is its natural account balance so we increase the asset increase the liability the liability was 20,000 more than the asset asset which results in a decrease in Revenue this formula applies to any situation you could have previously 20,000 in your actual and 40,000 and decid Ed that it was 25,000 and 35,000 here in this case the asset increased by 5,000 the liability decreased by 5,000 that means it's a debit so the offset is a credit to revenue which increased Revenue 25,000 under Billings 35,000 and over Billings Revenue went up by 10,000 from 442 to 452 hope that was helpful I'll see you in the next lesson