During Connolly Ltd started a construction job with a contract price of $ The job was completed in and information for the three years of construction is as follows:

$$

 

TOTAL costs incurred to date ie sum of all costs, for all years, incurred at the end of the year

Estimated costs to complete as estimated at year end

Billings to date

Collections to date

 

Required:

Using the PERCENTAGEOFCOMPLETION costtocost method:

Show and label all calculations.

a Calculate the total percentage complete for the contract at the end of each year. Round the percentage complete to two decimal places ie ####

b Calculate the amount of gross profit that should be recognized each year on the contract.

c What would be the value of the Contract AssetLiability account at December and indicate if it is in an asset or liability position