Answer:
The construction in process amount reported at December 2021 is $13,695,000
Explanation:
In this question, we are asked to state the amount the company will report construction in the process of.
Firstly, we calculate the profit = Total contract price - Expected costs of contract = $24,900,000-$22,900,000 = $2,000,000
The profit in percentage of cost is; 2,000,000/22,900,000 = 8.73%
The costs incurred in 2021 is $12,595,000
The proportionate profit = 12,595,000 * 8.73 = $1,100,000
The construction in process at December 2021 = Cost incurred + Proportionate profit = 12,595,000 + 1,100,000 = $13,695,000
