Long-Term Construction Contract Osborn Construction Company began operations January 2, 2013. During the year, Osborn entered into a contract with Redbeard Razor Corporation to construct
Long-Term Construction Contract
Osborn Construction Company began operations January 2, 2013. During the year, Osborn entered into a contract with Redbeard Razor Corporation to construct a manufacturing facility. At that time, Osborn estimated that it would take 5 years to complete the facility at a total cost of $4,800,000. The total contract price for construction of the facility is $6,000,000. During the year, Osborn incurred $1,250,000 in construction costs related to the construction project. The estimated cost to complete the contract is $3,750,000. Redbeard was billed and paid 30% of the contract price.
If an amount is zero, enter zero.
2b. Percentage-of-completion method (Computation of Billings on Uncompleted Contract)
| Osborn Construction Company | |
| Billings in Excess of Related Costs | |
| |
| Construction costs incurred during the year | | | |
| Gross profit recognized during the year | | | |
| Total charged to construction in progress | | | |
| Partial billings on contract | | | |
| Billings on uncompleted contract in excess of related costs | | | |
