In 2019, Tarlo Company agrees to construct a highway for Brice County over a 3-year period (2019 through 2021). The contract price is $1,200,000, and the construction costs (both actual and estimated) total $705,000 for the 3 years. Tarlo's estimate of progress toward satisfaction of the performance obligation at the end of each year is as follows: 2019, 20%; 2020, 75%; 2021, 100%. Required: 1. Prepare a schedule showing the amount of gross profit that Tarlo recognizes each year assuming the performance obligation is determined to be satisfied over time. Tarlo Company Gross Profit: Percentage-of Completion Method 2019 through 2021   Amount 2019 $ 2020   2021   Total gross profit $ 2. Prepare a schedule showing the amount of gross profit that Tarlo recognizes each year assuming the performance obligation is satisfied at a point in time. If an amount is zero, enter "0". Tarlo Company Gross Profit: Completed-Contract Method 2019 through 2021   Amount 2019 $ 2020   2021   Total gross profit $

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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In 2019, Tarlo Company agrees to construct a highway for Brice County over a 3-year period (2019 through 2021). The contract price is $1,200,000, and the construction costs (both actual and estimated) total $705,000 for the 3 years. Tarlo's estimate of progress toward satisfaction of the performance obligation at the end of each year is as follows: 2019, 20%; 2020, 75%; 2021, 100%.

Required:

1. Prepare a schedule showing the amount of gross profit that Tarlo recognizes each year assuming the performance obligation is determined to be satisfied over time.

Tarlo Company
Gross Profit: Percentage-of Completion Method
2019 through 2021
  Amount
2019 $
2020  
2021  
Total gross profit $

2. Prepare a schedule showing the amount of gross profit that Tarlo recognizes each year assuming the performance obligation is satisfied at a point in time. If an amount is zero, enter "0".

Tarlo Company
Gross Profit: Completed-Contract Method
2019 through 2021
  Amount
2019 $
2020  
2021  
Total gross profit $
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