Jacks Contractors received a contract to construct a mental health facility for $2,500,000.
Construction was begun in 2005 and completed in 2006. Cost and other data are presented below:
Costs incurred during the year $1,500,000 $1,300,000
Remaining estimated costs to complete 1,200,000 0
Billings during the year 1,200,000 1,300,000
Cash collections during the year 1,000,000 1,500,000
Assume that Jacks uses the percentage-of-completion method for revenue recognition.
Compute the amount of gross profit recognized during 2005 and 2006.© BrainMass Inc. brainmass.com September 20, 2018, 2:25 pm ad1c9bdddf - https://brainmass.com/business/percentage-of-completion-method/percentage-of-completion-method-101204
The costs incurred are 1,500,000 and the total cost to complete the project are ...
The solution explains the calcuation of gross profit under the percentage of completion method