12. Howard Construction Co. contracted to build a bridge for $3,000,000.
Construction began in 2004 and was completed in 2005. Data relating
to the construction are:
Costs incurred $990,000 $825,000
Estimated costs to complete 810,000 ??
Howard uses the percentage-of-completion method.
(a) How much revenue should be reported for 2004? Show your
(b) Make the entry to record progress billings of $1,000,000 during
(c) Make the entry to record the revenue and gross profit for 2004.
(d) How much gross profit should be reported for 2005? Show your
The solution uses the percentage of completion method to compute revenues for Howard Construction Co.