On February 1, 2023, Magicfort Contractors agreed to construct a building at a contract price of $5,840,000. Magicfort estimatedtotal construction costs would be $4,032,000 and the project would be finished in 2025. Information relating to the costs and billingsfor this contract is as follows:202320242025Total costs incurred to dateEstimated costs to complete$1,512,0002,520,000$2,664,000 $4,620,0001,776,000-0-Customer billings to date2,240,0004,032,0005,640,000Collections to date2,040,0003,540,0005,540,000Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and cost-recovery accounting, showthe gross profit that should be reported for 2023, 2024, and 2025.Percentage-of-CompletionGross Profit20232023Cost-RecoveryGross Profit2024$2025$SA20242025$

Working for % ofcompletion method202320242025AContract Price$5,840,000$5,840,000$5,840,000BCost…

Answered: Fill in the correct amounts on the…

Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and cost-recovery accounting, show the e gross profit that should be reported for 2023, 2024, and 2025.

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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Question

On February 1, 2023, Magicfort Contractors agreed to construct a building at a contract price of $5,840,000. Magicfort estimated
total construction costs would be $4,032,000 and the project would be finished in 2025. Information relating to the costs and billings
for this contract is as follows:
2023
2024
2025
Total costs incurred to date
Estimated costs to complete
$1,512,000
2,520,000
$2,664,000 $4,620,000
1,776,000
-0-
Customer billings to date
2,240,000
4,032,000
5,640,000
Collections to date
2,040,000
3,540,000
5,540,000
Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and cost-recovery accounting, show
the gross profit that should be reported for 2023, 2024, and 2025.
Percentage-of-Completion
Gross Profit
2023
2023
Cost-Recovery
Gross Profit
2024
$
2025
$
SA
2024
2025
$

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