Prepare schedules to compute the profit and loss

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Question - Hardhat Construction Company has a contract to construct a €4,500,000 bridge at an estimated cost of €4,556,250. The contract is to start in July 2019, and the bridge is to be completed in October 2021. The following data pertain to the construction period.

 

2019

2020

2021

Cost to date

$1,000,000

$2,916,000

$4,556,250

Estimated cost to complete

3,000,000

$1,640,250

-

Progress billing during the year

900,000

2,400,000

1,200,000

Cash collected during the year

750,000

1,750,000

2,000,000

REQUIRED -

a) Using percentage-of-completion method, prepare schedules to compute the profit and loss to be recognized as a result of this contract for the year ended October 31, 2019, 2020 and 2021.

b) Using cost recovery method, prepare schedules to compute the profit and loss to be recognized as a result of this contract for the year ended October 31, 2019, 2020 and 2021.

Reference no: EM132895111

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