Assume the following facts for a construction contract that was completed over four years. The contract price is $5.1 million.
$$\begin{array} { | l | r | r | r | r | }
\hline & 2020 & 2021 & 2022 & 2023 \
\hline \text { Costs incurred to date } & 750,000 & 2,033,000 & 2,610,000 & 4,350,000 \
\hline \text { Estimated costs to complete } & 2,250,000 & 3,317,000 & 1,740,000 & 0 \
\hline
\end{array}$$ 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.

Question

Assume the following facts for a construction contract that was completed over four years. The contract price is $5.1 million.
 $$\begin{array} { | l | r | r | r | r | } 
\hline & 2020 & 2021 & 2022 & 2023 \
\hline \text { Costs incurred to date } & 750,000 & 2,033,000 & 2,610,000 & 4,350,000 \
\hline \text { Estimated costs to complete } & 2,250,000 & 3,317,000 & 1,740,000 & 0 \
\hline
\end{array}$$ 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.

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.
 $$\begin{array} { | l | r | r | r | r | } 
\hline & 2020 & 2021 & 2022 & 2023 \
\hline \text { Costs incurred to date } & 750,000 & 2,033,000 & 2,610,000 & 4,350,000 \
\hline \text { Estimated costs to complete } & 2,250,000 & 3,317,000 & 1,740,000 & 0 \
\hline
\end{array}$$ 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.

Assume the Following Facts for a Construction Contract That Was