1. Epsilon Construction

Scenario: Long-Term Contract Completion

Data:

• Contract Revenue: $1,000,000
• Costs Incurred to Date: $700,000
• Estimated Costs to Complete: $200,000

Requirements:

1. Calculate the Gross Profit recognized to date for Epsilon Construction.
2. Determine the Percentage of Completion for the contract.
3. Estimate the Cost of Goods Sold upon completion of the contract.
4. Discuss the impact of contract accounting on COGS and revenue recognition.
5. Evaluate the profitability of the project based on COGS and revenue.