Determining percentage-of-completion method

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Dalton Construction Co. contracted to build a bridge for $5,000,000. Construction began in 2010 and was completed in 2011. Data relating to the construction are:

2010 2011

Costs incurred $1,650,000 $1,375,000

Estimated costs to complete 1,350,000 -

Dalton uses the percentage-of-completion method.

Instructions

a) How much revenue should be reported for 2010? Show your computation.

b) Make the entry to record progress billings of $1,650,000 during 2010.

c) Make the entry to record the revenue and gross profit for 2010.

d) How much gross profit should be reported for 2011? Show your computation.

Reference no: EM13154632

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