Homework Answers
Solution:
| Year | Actual cost incurred (A) | Total cost incurred till date (B) | Total estimated Cost ( C ) | % of completion (D) (B/C) |
Contract Price (E) |
Total Revenue to be recoganized (F) (E * D) | Revenue for current period (G) | Gross Profit (H) (G - A) |
| 2018 | $2,00,000 | $2,00,000 | $20,00,000 | 10.00% | $30,00,000 | $3,00,000 | $3,00,000 | $1,00,000 |
| 2019 | $9,00,000 | $11,00,000 | $22,00,000 | 50.00% | $30,00,000 | $15,00,000 | $12,00,000 | $3,00,000 |
| 2020 | $9,00,000 | $20,00,000 | $24,00,000 | 83.33% | $30,00,000 | $25,00,000 | $10,00,000 | $1,00,000 |
Hence, Gross profit for 2020 = $100,000
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70
$
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long-term construction contract to build a baseball stadium in
Washington, D.C., for $370 million. The expected completion date is
April 1, 2023, just in time for the 2023 baseball season. Costs
incurred and estimated costs to complete at year-end for the life
of the contract are as follows ($ in millions):
2021
2022
2023
Costs incurred during the year
$
70
$
110
$
80
Estimated costs
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