At the beginning of 2013, the Harding Construction Company received a contract to build an office building
Question:
At the beginning of 2013, the Harding Construction Company received a contract to build an office building for $10 million. Harding will construct the building according to specifications provided by the buyer, and the project is estimated to take three years to complete. According to the contract, Harding will bill the buyer in installments over the construction period according to a prearranged schedule. Information related to the contract is as follows:
2013 | 2014 | 2015 | |||
Cost incurred during the year | $2,300,000 | $3,600,000 | $2,100,000 | ||
Estimated costs to complete | 5,300,000 | 2,000,000 | 0 | ||
Billings during the year | 1,700,000 | 4,000,000 | 4,300,000 | ||
Cash collections during the year | 1,600,000 | 3,600,000 | 4,300,000 |
Calculate the following:
Gross profit recognized: | Percentage of completion Method | ||
2013 | |||
2014 | |||
2015 | |||
Total gross profit: |
Please show all the process and correct answers
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer