Assume the following facts for a construction contract that was completed over four years. The contract price is $5.1 million.
Required:
a. Using the percentage of completion method, calculate the gross profit or loss to be recognized as a result of this contract for each of the four years. The company used the cost-to-cost method to estimate the percentage complete.
b. If this company were permitted to use guidance in the CICA Handbook, and the company chose to apply the completed contract method, what would be the gross profit or loss in each of the four years?

Question

Assume the following facts for a construction contract that was completed over four years. The contract price is $5.1 million.
  Required:
a. Using the percentage of completion method, calculate the gross profit or loss to be recognized as a result of this contract for each of the four years. The company used the cost-to-cost method to estimate the percentage complete.
b. If this company were permitted to use guidance in the CICA Handbook, and the company chose to apply the completed contract method, what would be the gross profit or loss in each of the four years?

Quizplus · Accepted Answer

The Answer of Assume the following facts for a construction contract that was completed over four years. The contract price is $5.1 million.
  Required:
a. Using the percentage of completion method, calculate the gross profit or loss to be recognized as a result of this contract for each of the four years. The company used the cost-to-cost method to estimate the percentage complete.
b. If this company were permitted to use guidance in the CICA Handbook, and the company chose to apply the completed contract method, what would be the gross profit or loss in each of the four years?

Assume the Following Facts for a Construction Contract That Was