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Calculate the amount of revenue recognized

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Reference no: EM132942421

On January 1, 2020, Reds Construction Ltd. started a construction project for $ 5,000,000. Relevant data for 2020 and 2021 are as follows:

                                                                  2020                     2021

Current year construction costs          $ 3,600,000      $ 365,000

Estimated remaining costs to complete   350,000                 -0-

Current year billings                            3,500,000         1,500,000

Current year collections                      2,800,000          1,700,000

Instructions

Problem 1: Calculate the following amounts using the percentage of completion method. Please round all your answers to the nearest dollar:

a)The amount of revenue recognized using the percentage completion method for 2020 and 2021.

b)The amount of gross profit for 2020 and 2021.

c) The year-end balance of Construction Contract Asset (Liability) for 2020 and 2021.

d) The year-end balance of Accounts Receivable for 2020 and 2021.

Reference no: EM132942421

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