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Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,820,000. The project was begun in 2020 and
Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,820,000. The project was begun in 2020 and completed in 2021. Cost and other data are presented below:
| 2020 | 2021 | |||||
| Costs incurred during the year | $ | 518,000 | $ | 1,120,000 | ||
| Estimated costs to complete | 962,000 | 0 | ||||
| Billings during the year | 410,000 | 1,410,000 | ||||
| Cash collections during the year | 310,000 | 1,510,000 | ||||
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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