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Compute the amount of gross profit to be recognized

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On March 1, 2012, Chance Company entered into a contract to build an apartment building. It is estimated that the building will cost $2,193,000 and will take 3 years to complete. The contract price was $3,043,000. The following information pertains to the construction period.

2012
2013
2014
Costs to date $657,900 $1,494,060 $2,076,000
Estimated costs to complete 1,535,100 524,940 -0-
Progress billings to date 827,000 2,061,000 3,043,000
Cash collected to date 781,000 1,928,000 2,899,000

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

Reference no: EM13126390

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