Prepare schedules to calculate the amount of gross profit

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Oriole Construction Company began operations on January 1, 2020. During the year, Oriole entered into a non-cancellable contract with Cheyenne Corp. to construct a manufacturing facility. At that time, Oriole estimated that it would take five years to complete the facility at a total cost of $4,484,000. The total contract price for construction of the facility is $5,972,000. During the year, Oriole incurred $1,082,400 in construction costs related to the project. The estimated cost to complete the contract is $4,329,600. Cheyenne Corp. was billed and paid 25% of the contract price. The billings are non-refundable.

Problem 1: Prepare schedules to calculate the amount of gross profit to be recognized for the year ended December 31, 2020, and the amount to be shown as contract assets or liabilities at December 31, 2020, under each of the following methods.

Reference no: EM132685147

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