Blossom Construction Company uses the percentage-of-completion method of accounting. In 2021, Blossom began work on a contract it had received which provided for a contract price of $47500000. Other details follow: 2021Costs incurred during the year$22000000Estimated costs to complete as of December 3116000000Billings during the year21500000Collections during the year10500000What should be the gross profit recognized in 2021?

Gross Profit = Revenue - Cost incurred Cost incurred is given = $22000000 Now only Revenue needs…

Answered: Blossom Construction Company uses the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Blossom Construction Company uses the percentage-of-completion method of accounting. In 2021, Blossom began work on a contract it had received which provided for a contract price of $47500000. Other details follow:

	2021
Costs incurred during the year	$22000000
Estimated costs to complete as of December 31	16000000
Billings during the year	21500000
Collections during the year	10500000

What should be the gross profit recognized in 2021?

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