Question
Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,790,000. The project was begun in 2023 and
Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,790,000. The project was begun in 2023 and completed in 2024. Cost and other data are presented below:
| 2023 | 2024 | |
|---|---|---|
| Costs incurred during the year | $ 390,000 | $ 1,090,000 |
| Estimated costs to complete | 910,000 | 0 |
| Billings during the year | 500,000 | 1,290,000 |
| Cash collections during the year | 400,000 | 1,390,000 |
Assume that Beavis recognizes revenue on this contract over time according to percentage of completion.
Required:
Compute the amount of gross profit recognized during 2023 and 2024.
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Auditing That Matters
Authors: Norman D Marks
1st Edition
1537662023, 978-1537662022
