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    Percentage-of-Completion Gross Profit

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    On February 1, 2007, Nance Contractors agreed to construct a building at a contract price of $6,000,000. Nance estimated total construction costs would be $4,000,000 and the project would be finished in 2009. Information relating to the costs and billings for this contract is as follows:

    Total costs incurred to date $1,500,000 $2,640,000 $4,600,000
    Estimated costs to complete 2,500,000 1,760,000 -0-
    Customer billings to date 2,200,000 4,000,000 5,600,000
    Collections to date 2,000,000 3,500,000 5,500,000

    Instructions
    Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and for completed-contract accounting, show the gross profit that should be recorded for 2007, 2008, and 2009.

    Percentage-of-Completion Completed-Contract Gross Profit Gross Profit
    2007 ____________ 2007 ____________
    2008 ____________ 2008 ____________
    2009 ____________ 2009 ____________

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    https://brainmass.com/business/accounting/percentage-of-completion-gross-profit-241644

    Solution Preview

    Percentage-of-Completion Gross Profit
    On February 1, 2007, Nance Contractors agreed to construct a building at a contract price of $6,000,000. Nance estimated total construction costs would be $4,000,000 and the project would be finished in 2009. Information relating to the costs and billings for this contract is as follows:

    Total costs incurred to date $1,500,000 $2,640,000 $4,600,000
    Estimated costs to complete ...

    Solution Summary

    The percentage of completion gross profit for Nance Contractors are examined. The correct amounts are filled out on a schedule.

    $2.19

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