Problem 4

XYZ contracted to build a high-rise for			$ 20,000,000
Construction began in			2008
and is expected to be completed in			2010
	2008			2009
Costs incurred to date	$ 2,000,000			$ 6,000,000
Estimated costs to complete	$ 8,000,000			$ 6,000,000
XYZ uses the percentage-of-completion method.
(a) How much gross profit should be reported for 2007? Show your computation.
(b) How much gross profit should be reported for 2008? Show your computation.