On march 1 2014 pechstein construction company contracted, Ask an Expert

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On March 1, 2014, Pechstein Construction Company contracted to construct a factory building for Fabrik Manufacturing Inc. for a total contract price of $8,118,000. The building was completed by October 31, 2016. The annual contract costs incurred, estimated costs to complete the contract, and accumulated billings to Fabrik for 2014, 2015, and 2016 are given below.

2014 2015 2016

Contract costs incurred during the year $2,867,040 $2,675,520 $2,155,440

Estimated costs to complete 3,648,960 2,155,440 -0-

Bilings to Fabrik during the year 2,790,000 3,042,000 2,286,000

A. Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2014, 2015, and 2016.

B. Using the completed-contract method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2014, 2015, and 2016.

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M91525633

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