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Question - Pickle Company has contracted to build for the city of Charleston a new school. The estimated cost is $6,000,000 and the contract price is $9,000,000. The school took three years to complete as follows:
2020
2021
2022
Costs to Date
$1.500,000
$4,000,000
$6,200,000
Costs to Complete
$4,500,000
$2,200,000
$0
Amounts Billed to Date
$1,300,000
$5,800,000
$9,000,000
Collections to Date
$4,300,000
Required -
a) Determine using the percentage of completion method the gross profit to be recognized for: 2020 2021 2022.
b) Determine using the completed contract method the gross profit to be recognized for: 2020 2021 2022.
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