Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,850,000. The project was begun in 2023 and completed in 2024. Cost and other data are presented below: 2023 2024 Costs incurred during the year $ 435,000 $ 1,150,000 Estimated costs to complete 1,015,000 0 Billings during the year 425,000 1,425,000 Cash collections during the year 325,000 1,525,000 Assume that Beavis recognizes revenue on this contract over time according to percentage of completion. Required: Compute the amount of gross profit recognized during 2023 and 2024.
Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,850,000. The project was begun in 2023 and completed in 2024. Cost and other data are presented below: 2023 2024 Costs incurred during the year $ 435,000 $ 1,150,000 Estimated costs to complete 1,015,000 0 Billings during the year 425,000 1,425,000 Cash collections during the year 325,000 1,525,000 Assume that Beavis recognizes revenue on this contract over time according to percentage of completion. Required: Compute the amount of gross profit recognized during 2023 and 2024.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,850,000. The project was begun in 2023 and completed in 2024. Cost and other data are presented below:
| 2023 | 2024 | |
|---|---|---|
| Costs incurred during the year | $ 435,000 | $ 1,150,000 |
| Estimated costs to complete | 1,015,000 | 0 |
| Billings during the year | 425,000 | 1,425,000 |
| Cash collections during the year | 325,000 | 1,525,000 |
Assume that Beavis recognizes revenue on this contract over time according to percentage of completion.
Required:
Compute the amount of gross profit recognized during 2023 and 2024.
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