Problemon march 1 2012 chance company entered into a, Ask an Expert

Accounting

Problem:

On March 1, 2012, Chance Company entered into a contract to build an apartment building. It is estimated that the building will cost $2,172,000 and will take 3 years to complete. The contract price was $3,121,000. The following information pertains to the construction period.

	2012	2013	2014
Costs to date	$673,320	$1,602,840	$2,014,000
Estimated costs to complete	1,498,680	563,160	-0-
Progress billings to date	855,000	1,853,000	3,121,000
Cash collected to date	810,000	1,707,000	3,009,000

Required:

Question: Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.

Note: Please show the work not just the answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91165633

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