Exercise 6-36

Shanahan Construction Company has entered into a non-cancellable contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $600,000 and will take three years to construct. The complex will be billed to the purchasing company at $900,000. The following data pertain to the construction period.

2020 2021 2022

Costs to date

$270,000 $450,000 $610,000

Estimated costs to complete

330,000 150,0000 0 Progress billings to date (non-refundable)

270,000 550,000 900,000

Cash collected to date

240,000 500,000 900,000

Using the percentage-of-completion method, calculate the estimated gross profit that would be recognized during each year of the construction period. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Gross profit / (loss)$

$

$

Using the completed-contract method, calculate the estimated gross profit that would be recognized during each year of the construction period. (Do not leave any answer field blank. Enter 0 for amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Gross profit / (loss)

$

$

$