Question

During Year 1, Sparky Construction Company has a contract to construct a $4,500,000 high-rise apartment building at an estimated cost of $4,000,000. The contract is to start in July of Year 1 and the high-rise apartment building is to be completed in October of Year 3. The following data pertain to the construction period (Note: by the end of Year 2, Sparky has revised the estimated total cost from $4,000,000 to $4,050,000) Year 1Year 2 Year 3 Costs to Date $1,000,000 $2,916,000 $4,050,000 Estimated costs to $3,000,000 $1,134,000 $ - 0 complete Progress bilings during S 900,000$2,400,000 $1,200,000 the year Cash collected during the year $ 750,000 $1,750,000 $2,000,000 What is Sparky's percentage completion in Year 2?

Answer 1

Answer

The answer and procedures of the exercise are attached in the following archives.

Explanation  

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

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Answer 2

Answer:

70.54%

Explanation:

To get the percentage of completion, you will simply divide the cost to date over the total estimated cost of the period. So based on the above given problem, computation of percentage of completion follows;

Percentage of completion = cost to date / total estimated cost

% of completion = $2,916,000 / ($3,000,000 + $1,134,000)

% of completion = $2,916,000/$4,134,000

% of completion = 70.54%