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How much is the loss provision recognized

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Reference no: EM133011547

In 20x1, Break Construction Co. started work on a 5,000,000 fixed price contract. Information on the construction is shown below:

                                                    20x1                   20x2                 20x3

Cost incurred to date            1,425,000          4,040,000        5,080,000

Estimated costs to complete   3,325,000          1,010,000

Break uses the percentage of completion method (based on costs) in recognizing revenue and profit from the contract.

Problem 1: How much is the loss provision recognized in 20x2?

Problem 2: How much is the profit (loss) recognized in 20x3?

Reference no: EM133011547

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