Blossom Construction Company has entered into a non-cancellable contract beginning January 1, 2023, to build a parking complex. It has been estimated that the complex will cost $625,000 and will take three years to construct. The complex will be billed to the purchasing company at $900,000. The following data pertain to the construction period. Costs to date Estimated costs to complete Progress billings to date (non-refundable) Cash collected to date 2023 2024 2025 $281,250 $468,750 $635,000 343,750 156,250 281,250 575,000 251.250 525,000 0 900,000 900,000
Blossom Construction Company has entered into a non-cancellable contract beginning January 1, 2023, to build a parking complex. It has been estimated that the complex will cost $625,000 and will take three years to construct. The complex will be billed to the purchasing company at $900,000. The following data pertain to the construction period. Costs to date Estimated costs to complete Progress billings to date (non-refundable) Cash collected to date 2023 2024 2025 $281,250 $468,750 $635,000 343,750 156,250 281,250 575,000 251.250 525,000 0 900,000 900,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Blossom Construction Company has entered into a non-cancellable contract beginning January 1, 2023, to build a parking complex. It
has been estimated that the complex will cost $625,000 and will take three years to construct. The complex will be billed to the
purchasing company at $900.000. The following data pertain to the construction period.
Costs to date
Estimated costs to complete
Progress billings to date (non-refundable)
Cash collected to date
2024
$281,250
$468,750
343,750 156,250
281,250
575,000
525,000
2023
251,250
2025
$635,000
0
900,000
900,000
Transcribed Image Text:Using the percentage-of-completion method, calculate the estimated gross profit that would be recognized during each year of
the construction period. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg. (45))
Gross profit/(loss)
2023
126000
s
2024
84000
2025
70000
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