Solution-Compute the estimated gross profit

Compute the estimated gross profit

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Reference no: EM132622978

Question - BOSS Construction Company has entered into a contract beginning January 1, 2019, to build a parking complex. It has been estimated that the complex will cost $1,500,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $2,250,000. The following data pertain to the construction period.

	2019	2020	2021
Costs to date	$675,000	$1,125,000	$1,525,000
Estimated costs to complete	825,000	375,000	0
Progress billings to date	675,000	1,375,000	2,250,000
Cash collected to date	600,000	1,250,000	2,250,000

Instructions -

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 cost-recovery method, compute the estimated gross profit that would be recognized during each year of the construction period.

Reference no: EM132622978

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Compute the estimated gross profit

Reference no: EM132622978

Reference no: EM132622978

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