Question
Mikell Builders contracted to build a high-rise for $10,000,000. Construction began in 2020 and is expected to be completed in 2022. Data for 2020 and
Mikell Builders contracted to build a high-rise for $10,000,000. Construction began in 2020 and is expected to be completed in 2022. Data for 2020 and 2021 are:
2020 | 2021 | 2022 | |
Costs to date | 4,500,000 | 7,200,000 | 8,600,000 |
Estimated costs to complete | 3,000,000 | 1,200,000 | 0 |
Mikell uses the percentage-of-completion method.
Required:
Compute the amount of gross profit (loss) that Mikell must report for 2020.
Compute the amount of gross profit (loss) that Mikell must report for 2021.
Compute the amount of gross profit (loss) that Mikell must report for 2022.
Assume instead that Mikell uses the completed contract method. Compute the amount of gross profit (loss) that Mikell must report for each the three years - 2020, 2021, and 2022.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started