Reference no: EM132693597

Question - Tamarisk Construction Company has entered into a contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $596,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $895,000. The following data pertain to the construction period.

2020 2021 2022

Costs to date $268,200 $482,760 $605,000

Estimated costs to complete 327,800 113,240 -0-

Progress billings to date 267,000 552,000 895,000

Cash collected to date 237,000 502,000 895,000

Required -

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

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