Question

5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.)

Answer 1

Answer:

Percentage of completion method                    

                                                  2018                 2019              2020

revenue(10mil*%complete)  $3888890        $5258030    $853080

cost incurred                       -$2184000       - $3860000    -$4080000

Gross profit                          $1704890          $1398030     -$3226920

percent complete                          2018                        2019                 2020

cost incurred/ estimated cost        38.3889%           91.4692%             100%

Revenues for 2019 = contract price * %complete - 2018 revenues

Revenues for 2020 = total contract price - revenues for 2018 and 2019

Explanation:

COMPLETE QUESTION BELOW

5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.)

2018 2019 2020

Cost incurred during the year $ 2,184,000  $ 3,860,000  $ 4,080,000  

Estimated costs to complete as of year-end  5,616,000   4,220,000   0  

2018 2019 2020

Revenue    

Gross profit (loss)    

UPDATE: Contract price is $10,000,000