During 2020, Nilsen Company started a construction job with a contract price of $1,600,000. The job was completed in 2022. 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. Prepare all necessary journal entries for 2021.

c. Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used.

Transcribed Image Text:

2020 2021 2022 Costs incurred to date Estimated costs to complete Billings to date |Collections to date $825,000 $400,000 $1,070,000 275,000 -0- 300,000 900,000 1,600,000 270,000 810,000 1,425,000