Explain how much gross profit should be reported

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Reference no: EM13128058

Penner Builders contracted to build a high-rise for $14,000,000. Construction began in 2010 and is expected to be completed in 2013. Data for 2010 and 2011 are:
2010 2011
Costs incurred to date $1,800,000 $5,200,000

Estimated costs to complete 7,200,000 4,800,000

Penner uses the percentage-of-completion method.

Instructions

(a) How much gross profit should be reported for 2010? Show your computation.

(b) How much gross profit should be reported for 2011?

Reference no: EM13128058

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