Answer:
revenue recognized
- 2018 = $3,000,000
- 2019 = $4,500,000
- 2020 = $2,500,000
gross profit
- 2018 = $600,000
- 2019 = $900,000
- 2020 = $300,000
Explanation:
Percentage of 2018 2019 2020
completion method
Cost incurred in $0 $2,400,000 $6,000,000
previous year
+ Cost incurred $2,400,000 $3,600,000 $2,200,000
during the year
Total cost incurred $2,400,000 $6,000,000 $8,200,000
+ Estimated cost to $5,600,000 $2,000,000 $0
be incurred
Total estimated cost $8,000,000 $8,000,000 $8,200,000
to be incurred
Percentage of 30% 75% 100%
completion
Total revenue $10,000,000 $10,000,000 $10,000,000
Total revenue $3,000,000 $7,500,000 $10,000,000
recognized (% of completion x total revenue)
- Revenue recognized ($0) ($3,000,000) ($7,500,000)
in previous year
= revenue recognized $3,000,000 $4,500,000 $2,500,000
in current year
gain/loss 2018 2019 2020
Revenue $3,000,000 $4,500,000 $2,500,000
- Cost incurred ($2,400,000) ($3,600,000) ($2,200,000)
Gross profit $600,000 $900,000 $300,000
