Jana Crebs is a contractor for the construction of large office buildings. At the beginning of 2011, three buildings were in progress. The following data describe the status of these buildings at the beginning of the year:

During 2011, the following costs were incurred.
Building 1 $930,000 (estimated cost to complete as of December 31, 2011, $750,000)
Building 2 $1,800,000 (job completed)
Building 3 $7,400,000 (estimated cost to complete as of December 31, 2011, $2,800,000)
Building 4 $800,000 (contract price, $2,500,000; estimated cost to complete as of December 31, 2011, $1,200,000)

Instructions:
1. Compute the total revenue, costs, and gross profit in 2011. Assume that Crebs uses the cost-to-cost percentage-of-completion method. (Round to two decimal places for percentage completed.)
2. Compute the gross profit for 2011 if Crebs uses the completed-contractmethod.

Transcribed Image Text:

Costs Incurred to Estimated Cost to Complete as of Jan. 1, 2011 Contract Price Jan. 1, 2011 Building I Building 2 Building 3 $ 4,000,000 9,000,000 13,150,000 $2,070,000 6.318,000 3.000,000 $1,380,000 ,782.000 9.000,000