Construction Accounting

The Pierson Construction Corporation contracted with the City of Plaquemine to construct a dam on the bayou at a price of $15,000,000. Pierson expects to earn $2,270,000 on the contract. The percentage-of-completion method is to be used, and the completion stage is to be determined by estimates made by the engineer. The following schedule summarizes the activities of the contract for the years 2012 - 2014.

1. Prepare a schedule showing the revenue, cost, and the gross profit earned each year under the percentage-of-completion method, using the engineer's estimate as the measure of completion to be applied to revenues and costs. If there is no value to enter, leave the entry box blank. Enter amounts as positive numbers.

Cost Incurred Engineer's Estimated Cost to Complete Estimate of Completion Billings on Contract Collection on Billings Year $4,300,000 4,100,000 4,550,000 $8,560,000 4,700,000 0 33% 62 100 $4,000,000 5,000,000 6,000,000 53,600,000 5,100,000 6,300,000 2013