During 2020, Nilsen Company started a construction job with a contract price of $1,600,000. The job was completed in 2022. The following information is available. 202020212022Costs incurred to date$400,000$825,000$1,070,000Estimated costs to complete 600,000 275,000–0–Billings to date 300,000 900,000 1,600,000Collections to date 270,000 810,000 1,425,000Compute the amount of gross profit to be recognized each year, assuming the cost-recovery method is used.

Gross Profit- Gross profit, also recognized as gross income, equals a corporation's revenues…

Answered: During 2020, Nilsen Company started a…

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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During 2020, Nilsen Company started a construction job with a contract price of $1,600,000. The job was completed in 2022. The following information is available.

	2020	2021	2022
Costs incurred to date	$400,000	$825,000	$1,070,000
Estimated costs to complete	600,000	275,000	–0–
Billings to date	300,000	900,000	1,600,000
Collections to date	270,000	810,000	1,425,000

Compute the amount of gross profit to be recognized each year, assuming the cost-recovery method is used.

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