Question
In: Accounting
On January 1, 2018, Grumpy Contractors agreed to construct a building at a contract price of...
On January 1, 2018, Grumpy Contractors agreed to construct a building at a contract price of $5,000,000. Grumpy estimates that the project will be finished in 2020. Information related to the costs and billings for this contract are as follows:
| 2018 | 2019 | 2020 | |
| Total costs incurred to date | $1,500,000 | $3,300,000 | $4,400,000 |
| Estimated costs to complete | 2,500,000 | 1,000,000 | -0- |
| Customer billings to date | 1,200,000 | 2,700,000 | 4,400,000 |
| Collections to date | 1,000,000 | 2,500,000 | 4,400,000 |
Instructions:
Assuming the building was finished in 2020, calculate the gross
profit that would be recorded for 2018, 2019 and 2020 using
the:
a) Completed contract method.
b) Percentage of completion method.
Solutions
Expert Solution
please find solution in pictures attached.
under completion method gross profit is realised only when
construction is complete while under percentage completion method
it is recorded as and when some percent of construction is
complete.
don't forget to upvote it if this helps :) 
ekkarill92 answered 1 year agoRelated Solutions
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