Calculate the estimated gross profit

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Question - Carla Vista Construction Company has entered into a non-cancellable contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $620,000 and will take three years to construct. The complex will be billed to the purchasing company at $970,000. The following data pertain to the construction period.

 

2020

2021

2022

Costs to date

$279,000

$465,000

$630,000

Estimated costs to complete

341,000

155,000

0

Progress billings to date (non-refundable)

279,000

570,000

970,000

Cash collected to date

249,000

520,000

970,000

Required -

1) Using the percentage-of-completion method, calculate the estimated gross profit that would be recognized during each year of the construction period.

2) Using the completed-contract method, calculate the estimated gross profit that would be recognized during each year of the construction period.

Reference no: EM133049965

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