Question
Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,740,000. The project was begun in 2020 and
Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,740,000. The project was begun in 2020 and completed in 2021. Cost and other data are presented below:
| 2020 | 2021 | |||||
| Costs incurred during the year | $ | 405,000 | $ | 1,040,000 | ||
| Estimated costs to complete | 945,000 | 0 | ||||
| Billings during the year | 475,000 | 1,265,000 | ||||
| Cash collections during the year | 375,000 | 1,365,000 | ||||
Assume that Beavis recognizes revenue on this contract over time according to percentage of completion. Required: Compute the amount of gross profit recognized during 2020 and 2021.
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Advanced Management Accounting Pearson New International
Authors: Robert Steven Kaplan, Anthony A. Atkinson
3rd Edition
1292026596, 978-1292026596
