Shanahan Construction Company has entered into a non-cancellable contract beginning January 1, 2020, to build a parking

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Shanahan Construction Company has entered into a non-cancellable contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $600,000 and will take three years to construct. The complex will be billed to the purchasing company at $900,000. The following data pertain to the construction period.

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Instructions

a. Using the percentage-of-completion method, calculate the estimated gross profit that would be recognized during each year of the construction period.

b. Using the completed-contract method, calculate the estimated gross profit that would be recognized during each year of the construction period.

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Related Book For  book-img-for-question

Intermediate Accounting Volume 1

ISBN: 978-1119496496

12th Canadian edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy

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