Homework Answers
Solution:
| Computation of % of completion, revenue recognition and Gross Profit - Beck Construction (In Millions) | ||||||||
| 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) |
| 2019 | $20 | $20 | $100 | 20.00% | $105 | $21 | $21 | $1 |
| 2020 | $45 | $65 | $90 | 72.22% | $105 | $76 | $55 | $10 |
| 2021 | $34 | $99 | $99 | 100.00% | $105 | $105 | $29 | -$5 |
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three-year construction contract to build a bridge for a price of
$8,060,000. During 2018, costs of $2,020,000 were incurred with
estimated costs of $4,020,000 yet to be incurred. Billings of
$2,520,000 were sent, and cash collected was $2,270,000.
In 2019, costs incurred were $2,520,000 with remaining costs
estimated to be $3,630,000. 2019 billings were $2,770,000 and
$2,495,000 cash was collected. The project was completed in 2020
after additional costs of...
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