Question

A construction company decides to take a new job. The estimated income and expenses of this job are shown in the table below. The company is using Percentage Of Completion (POC) accounting method. The bills received by this company at the different months are shown below. Please determine the following:[40 points 6. The anticipated gross profit and percentage (%) in the table below a. b. The percentage of the project completion at the end of the 1t AND 2ad months . The revenue AND the profit AND the profit percentage [%] at the end of the 1st month d. \Determine the gross profit percentage (%) using cash, accrual, and completed ontract methods at the end of the 1st month, If the company billed an invoice to customer $50,000, received cash $30,000 from customer, and paid out ($10,000) to suppliers at the end of 1st month. Anticipated Fixed Price Contract (3-month job) Gross Profit % Anticipated income Anticipated costs Anticipated gross profit $ Amount $130,000.00 ($100,000.00) ?? 23 Receive bills ($25,000.00) Receive bills ($40,000.00) Receive bills ($25,000.00) Project timeline 1st month 2nd month rd month

Answer 1

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SOLUTION

10 Question 6b. % of Project Completion at the end of 1st and 2nd Month Costs Already Incurred Total Anticipated Costs % of Project Completion 12 13 2nd Month 65000 (1st month 1st Month 15 Bills Received 25000 will also be (Costs Incurred) included here 16 17 18 19 20 21 100000 100000 Total Anticipated Costs 0.25 0.65 % Completion