Question
In: Accounting
On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a...
On February 1, 2021, Arrow Construction Company entered into a
three-year construction contract to build a bridge for a price of
$8,480,000. During 2021, costs of $2,160,000 were incurred with
estimated costs of $4,160,000 yet to be incurred. Billings of
$2,660,000 were sent, and cash collected was $2,410,000.
In 2022, costs incurred were $2,660,000 with remaining costs
estimated to be $3,840,000. 2022 billings were $2,910,000 and
$2,635,000 cash was collected. The project was completed in 2023
after additional costs of $3,960,000 were incurred. The company’s
fiscal year-end is December 31. Arrow recognizes revenue over time
according to percentage of completion.
Required:
1. Compute the amount of revenue and gross profit
or loss to be recognized in 2021, 2022, and 2023 using the
percentage of completion method.
Solutions
Expert Solution
Formulas used :
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ekkarill92 answered 1 year agoRelated Solutions
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$2,500,000 were sent, and cash collected was $2,250,000.
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