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Compute the amount of gross profit to be recognized

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Reference no: EM132591148

Question - During 20X1 Nathan Company started a construction job with a contract price of $1,580,000. The job was completed in 20X3. The following information is available.

 

20X1

20X2

20X3

Costs incurred to date

$430,000

$766,500

$1,067,000

Estimated costs to complete

570,000

328,500

-0-

Billings to date

297,000

900,000

1,580,000

Collections to date

272,000

817,000

1,411,000

Instructions -

(a) Compute the amount of gross profit to be recognized in 20X1 and 20X2 assuming the percentage-of-completion method is used.

(b) Prepare the four necessary journal entries for 20X2.

(c) Compute the amount of gross profit to be recognized in 20X3 assuming the completed-contract method is used.

Reference no: EM132591148

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