Homework Answers
Solution:
| Computation of % of completion, revenue recognition and Gross Profit - Rangers Corp. | ||||||||
| 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) |
| 2014 | $2,000,000 | $2,000,000 | $7,000,000 | 28.57% | $10,000,000 | $2,857,143 | $2,857,143 | $857,143 |
| 2015 | $3,500,000 | $5,500,000 | $6,750,000 | 81.48% | $10,000,000 | $8,148,148 | $5,291,005 | $1,791,005 |
| 2016 | $1,100,000 | $6,600,000 | $6,600,000 | 100.00% | $10,000,000 | $10,000,000 | $1,851,852 | $751,852 |
| Computation of Gross Profit - Revenue on completion -Rangers Corp. | |||||
| Year | Actual cost incurred (A) | Total cost incurred till date (B) | Total estimated Cost ( C ) |
Contract Price (D) |
Gross Profit |
| 2014 | $2,000,000 | $2,000,000 | $7,000,000 | $10,000,000 | $0 |
| 2015 | $3,500,000 | $5,500,000 | $6,750,000 | $10,000,000 | $0 |
| 2016 | $1,100,000 | $6,600,000 | $6,600,000 | $10,000,000 | $3,400,000.00 |
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