Cullumber Construction Company has entered into a contract beginning January 1, 2022, to build a parking complex. It has been estimated that the complex will cost $599,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $905,000. The following data pertain to the construction period. 2022 2023 2024 Costs to date $257,570 $413,310 $609,000 Estimated costs to complete 341,430 185,690 -0- Progress billings to date 270,000 551,000 905,000 Cash collected to date 240,000 501,000 905,000 (a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter 0. Do not leave any fields blank.) Gross profit recognized in 2022 $ Gross profit recognized in 2023 $ Gross profit recognized in 2024 $ (b) Using the cost-recovery method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter 0. Do not leave any fields blank.) Gross profit recognized in 2022 $ Gross profit recognized in 2023 $ Gross profit recognized in 2024 $
Cullumber Construction Company has entered into a contract beginning January 1, 2022, to build a parking complex. It has been estimated that the complex will cost $599,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $905,000. The following data pertain to the construction period. 2022 2023 2024 Costs to date $257,570 $413,310 $609,000 Estimated costs to complete 341,430 185,690 -0- Progress billings to date 270,000 551,000 905,000 Cash collected to date 240,000 501,000 905,000 (a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter 0. Do not leave any fields blank.) Gross profit recognized in 2022 $ Gross profit recognized in 2023 $ Gross profit recognized in 2024 $ (b) Using the cost-recovery method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter 0. Do not leave any fields blank.) Gross profit recognized in 2022 $ Gross profit recognized in 2023 $ Gross profit recognized in 2024 $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
None
Transcribed Image Text:Cullumber Construction Company has entered into a contract beginning January 1, 2022, to build a parking complex. It has been
estimated that the complex will cost $599,000 and will take 3 years to construct. The complex will be billed to the purchasing company
at $905,000. The following data pertain to the construction period.
2022
2023
2024
Costs to date
$257,570
$413,310
$609,000
Estimated costs to complete
341,430
185,690
-0-
Progress billings to date
270,000
551,000
905,000
Cash collected to date
240,000
501,000
905,000
(a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the
construction period. (If answer is 0, please enter 0. Do not leave any fields blank.)
Gross profit recognized in 2022
$
Gross profit recognized in 2023
$
Gross profit recognized in 2024
$
(b) Using the cost-recovery method, compute the estimated gross profit that would be recognized during each year of the construction
period. (If answer is 0, please enter 0. Do not leave any fields blank.)
Gross profit recognized in 2022
$
Gross profit recognized in 2023
$
Gross profit recognized in 2024
$
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education