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Calculate the year-end balance of construction contract

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Reference no: EM132940050

On January 1, 2020, Red Sox Construction Ltd. started a construction project for $ 4,500,000. Relevant data for 2020 and 2021 are as follows:

                                                                       2020                  2021

Current year construction cost           $ 3,300,000       $ 620,000
Estimated remaining costs to complete   600,000            -0-
Current year billings                             3,100,000      1,400,000
Current year collections                     3,000,000             1,050,000

Instructions

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

  1. The amount of revenue recognized using the percentage completion method for 2020 and 2021.
  2. The amount of gross profit for 2020 and 2021.
  3. The year-end balance of Construction Contract Asset (Liability) for 2020 and 2021.
  4. The year-end balance of Accounts Receivable for 2020 and 2021.

Reference no: EM132940050

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