Solution-Compute the amount of gross profit recognized

Compute the amount of gross profit recognized

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Reference no: EM132774615

Problem - Seawolf Construction Company was the low bidder on a construction project to build an Hydroelectric Power Plant for $1,800,000. The project was begun in 2020 and completed in 2021. Cost and other data are presented below:

	2020	2021
Costs incurred during the year	$450,000	$1,100,000
Estimated cost to complete	1,050,000	0
Billings during the year	400,000	1,400,000
Cash collections during the year	300,000	1,500,000

Assume that Seawolf recognizes revenue on this contract over time according to percentage of completion.

Required -

a) Compute the amount of gross profit recognized during 2020 and 2021.

b) Prepare all journal entries to record costs, billings, collections, and profit recognition.

Reference no: EM132774615

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Compute the amount of gross profit recognized

Reference no: EM132774615

Reference no: EM132774615

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