During 2023, Cullumber Corporation started a construction job with a contract price of $3.78 million. Cullumber ran into severe technical difficulties during construction but managed to complete the job in 2025. The contract is non-cancellable. Under the terms of the contract, Cullumber sends billings as revenues are earned. Billings are non-refundable. The following information is available: Costs incurred to date Estimated costs to complete (a) 2023 $540,000 2,835,000 2024 $1,890,000 1,890,000 2025 $3,680,000 --0-
During 2023, Cullumber Corporation started a construction job with a contract price of $3.78 million. Cullumber ran into severe technical difficulties during construction but managed to complete the job in 2025. The contract is non-cancellable. Under the terms of the contract, Cullumber sends billings as revenues are earned. Billings are non-refundable. The following information is available: Costs incurred to date Estimated costs to complete (a) 2023 $540,000 2,835,000 2024 $1,890,000 1,890,000 2025 $3,680,000 --0-
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:During 2023, Cullumber Corporation started a construction job with a contract price of $3.78 million. Cullumber ran into severe
technical difficulties during construction but managed to complete the job in 2025. The contract is non-cancellable. Under the terms
of the contract, Cullumber sends billings as revenues are earned. Billings are non-refundable. The following information is available:
Costs incurred to date
Estimated costs to complete
(a)
2023
$540,000
2,835,000
Gross profit/(loss)
2024
$1,890,000
1,890,000
Calculate the amount of gross profit that should be recognized each year under the percentage-of-completion method. (Enter
negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45))
2023
2025
$3,680,000
2024
2025
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