Compute the amount of gross profit recognized

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Question - Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,810,000. The project was begun in 2020 and completed in 2021. Cost and other data are presented below:

 

2020

2021

Costs incurred during the year

$447,000

$1,110,000

Estimated costs to complete

1,043,000

0

Billings during the year

405,000

1,405,000

Cash collections during the year

305,000

1,505,000

Assume that Beavis recognizes revenue on this contract over time according to percentage of completion.

Required - Compute the amount of gross profit recognized during 2020 and 2021.

Reference no: EM132859652

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