Compute the estimated gross profit

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Question - Nash Construction Company has entered into a contract beginning January 1, 2017, to build a parking complex. It has been estimated that the complex will cost $599,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $905,000. The following data pertain to the construction period.

 

2017

2018

2019

Costs to date

$257,570

$413,310

$609,000

Estimated costs to complete

341,430

185,690

-0-

Progress billings to date

270,000

551,000

905,000

Cash collected to date

240,000

501,000

905,000

Required -

(a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period.

(b) Using the completed-contract method, compute the estimated gross profit that would be recognized during each year of the construction period.

Reference no: EM132473434

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