Compute amount of gross profit to be recognized each year

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Reference no: EM131911369

Problem

On March 1, 2014, Chance Company entered into a contract to build an apartment building. It is estimated that the building will cost $2,000,000 and will take 3 years to complete. The contract price was $3,000,000. The following information pertains to the construction period.

	2014	2015	2016
Costs to date	$600,000	$1,560,000	$2,100,000
Estimated costs to complete	1,400,000	520,000	-0-
Progress billings to date	1,050,000	2,000,000	3,000,000
Cash collected to date	950,000	1,950,000	2,850,000

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

Reference no: EM131911369

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