During 2007 Pierson Company started a construction job with a contract price of $1,500,000. The job was completed in 2009. The following information is available.

Instructions
(a) Compute the amount of gross profit to be recognized each year assuming the percentage-of-completion method is used.
(b) Compute the amount of gross profit to be recognized each year assuming the completed-contract method isused.

Transcribed Image Text:

2007 2008 2009 Costs incurred to date $400,000 $935,000 $1,070,000 Estimated costs to complete 165,000