Compute the gross profit recognized

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Question - In 2010 Acme Construction Company won the contract to construct an office building at a contract price of $1,200,000. The information relating to the costs and billings for this contract is shown below.

 

2010

2011

2012

Costs incurred to date **

$280,000

$600,000

$785,000

Estimated costs yet to be incurred

520,000

200,000

-0-

Customer billings to date **

250,000

500,000

1,200,000

Collections of billings to date **

120,000

320,000

1.040,000

Required:

Using the percentage-of-completion method compute the following:

1- Percent complete for 2010 and 2011.

2- Revenue recognized for 2010 and 2011.

3- Gross Profit recognized for 2010 and 2011.

4- Prepare the journal entries for 2011.

5- Prepare a partial balance sheet for 2010 (Do not present the cash GL account).

Reference no: EM131839385

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