Purchase Solution

Percentage of completion method

Not what you're looking for?

Ask Custom Question

Dear Brainmass,

I am having some difficulty with this problem. I would really appreciate the assistance when you get the chance. Thank you so much in advance for taking the time to review my post.

On February 1, 2006 Toms River Construction Company obtained a contract to build a baseball stadium in Lakewood for $3,300,000. The stadium was to be built at a total cost of $2,700,000 and was scheduled for completion by September 1, 2008. Important information is presented below:

2006 2007 2008

Costs to date 891,000 1,925,000 2,750,000
Estimated costs to complete 1,809,000 825,000 -0-
Progress billings to date 600,000 1,550,000 3,300,000
Cash collected to date 500,000 1,400,000 3,300,000

Required:

a) Using the percentage of completion method, compute the estimated gross profit recognized in the years 2006-2008.

b) Prepare a partial balance sheet for December 31, 2007, showing the balances in the accounts receivable and construction in process inventory account.

Please show all work for a better understanding of this material.

Purchase this Solution

Solution Summary

The solution explains the calculation of gross profit under the precentage of completion method and the preparation of a partial balance sheet

Purchase this Solution


Free BrainMass Quizzes
Lean your Process

This quiz will help you understand the basic concepts of Lean.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Introduction to Finance

This quiz test introductory finance topics.