Percentage of Completion - Recognize Revenue Over Time Example 1 On January 1, 2013, Duchac Construction Inc. began work on a three-year construction contract. The terms of the contract specified: Contract Price = $9,000,000 Estimated Cost to construct = $7,500,000 2014 $3,600,000 2,000,000 2015 2,000,000 The actual and estimated costs, billings and are as follows: 2013 Costs incurred during the year $2,400,000 Estimated costs to complete 5,100,000 (@ Dec. 31) Total Estimated Costs Percent Complete Billings during the year 3,000,000 Collections during the year 2,800,000 4,000,000 3,200,000 2,000,000 3,000,000 Required: 1. What is the amount of profit to be recognized over the life of the contract? 2. What percentage of complete is the project on the following dates: 2013 2014 2015 3. Assume that Duchac uses the percentage of completion method. What amount of revenue, expense and net income should Duchac recognize in 2013, 2014, and 2015 64