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.
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.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 26E
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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
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F679e8cca-6cc5-491c-b9ef-49448ed093a5%2F627ba6f2-3a41-424c-8ee9-2658e2acf07f%2Fmvvhb4_processed.png&w=3840&q=75)
Transcribed Image Text: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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