Mikell Builders contracted to build a high-rise for $10,000,000. Construction began in 2020 and is expected to be completed in 2022. Data for 2020 and 2021 are: 2020 2021 2022 Costs to date 4,500,000 7,200,000 8,600,000 Estimated costs to complete 3,000,000 1,200,000 0 Mikell uses the percentage-of-completion method. Required: Compute the amount of gross profit (loss) that Mikell must report for 2020. Compute the amount of gross profit (loss) that Mikell must report for 2021. Compute the amount of gross profit (loss) that Mikell must report for 2022. Assume instead that Mikell uses the completed contract method. Compute the amount of gross profit (loss) that Mikell must report for each the three years - 2020, 2021, and 2022.
Mikell Builders contracted to build a high-rise for $10,000,000. Construction began in 2020 and is expected to be completed in 2022. Data for 2020 and 2021 are: 2020 2021 2022 Costs to date 4,500,000 7,200,000 8,600,000 Estimated costs to complete 3,000,000 1,200,000 0 Mikell uses the percentage-of-completion method. Required: Compute the amount of gross profit (loss) that Mikell must report for 2020. Compute the amount of gross profit (loss) that Mikell must report for 2021. Compute the amount of gross profit (loss) that Mikell must report for 2022. Assume instead that Mikell uses the completed contract method. Compute the amount of gross profit (loss) that Mikell must report for each the three years - 2020, 2021, and 2022.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- Mikell Builders contracted to build a high-rise for $10,000,000. Construction began in 2020 and is expected to be completed in 2022. Data for 2020 and 2021 are:
|
2020 |
2021 |
2022 |
|
|
Costs to date |
4,500,000 |
7,200,000 |
8,600,000 |
|
Estimated costs to complete |
3,000,000 |
1,200,000 |
0 |
Mikell uses the percentage-of-completion method.
Required:
- Compute the amount of gross
profit (loss ) that Mikell must report for 2020. - Compute the amount of gross profit (loss) that Mikell must report for 2021.
- Compute the amount of gross profit (loss) that Mikell must report for 2022.
- Assume instead that Mikell uses the completed contract method. Compute the amount of gross profit (loss) that Mikell must report for each the three years - 2020, 2021, and 2022.
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