Shanahan construction company has entered into a contract

Reference no: EM13589222

Shanahan Construction Company has entered into a contract beginning January 1, 2012, to build a parking complex. It has been estimated that the complex will cost $600,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $900,000. The following data pertain to the construction period.

	2012	2013	2014
Costs to date	$270,000	$450,000	$610,000
Estimated costs to complete	330,000	150,000	-0-
Progress billings to date	270,000	550,000	900,000
Cash collected to date	240,000	500,000	900,000

(a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period.

Gross profit recognized in 2012		$
Gross profit recognized in 2013		$
Gross profit recognized in 2014		$

(b) Using the completed-contract method, compute the estimated gross profit that would be recognized during each year of the construction period.

Gross profit recognized in 2012		$
Gross profit recognized in 2013		$
Gross profit recognized in 2014		$

Reference no: EM13589222

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