On February 1, 2014, Marsh Contractors agreed to construct a building at a contract price of $5,800,000. Marsh estimated total construction costs would be $4,000,000 and the project would be finished in 2016. Information relating to the costs and billings for this contract is as follows:
On February 1, 2014, Marsh Contractors agreed to construct a building at a contract price of $5,800,000. Marsh estimated total construction costs would be $4,000,000 and the project would be finished in 2016. Information relating to the costs and billings for this contract is as follows:
2014 2015 2016
Total costs incurred to date $1,500,000 $2,640,000 $4,600,000
Estimated costs to complete 2,500,000 1,760,000 -0-
Customer billings to date 2,200,000 4,000,000 5,600,000
Collections to date 2,000,000 3,500,000 5,500,000
Instructions
Fill in the correct amounts on the following schedule.
Part A:
Percentage-of-Completion Completed-Contract
Gross Profit Gross Profit
2014 ___________ Revenue 2014 ___________ Revenue
___________ Expenses ___________ Expenses
___________ Gross Profit ___________ Gross Profit
2015 ___________ Revenue 2015 ___________ Revenue
___________ Expenses ___________ Expenses
___________ Gross Profit ___________ Gross Profit
2016 ___________ Revenue 2016 ___________ Revenue
___________ Expenses ___________ Expenses
___________ Gross Profit ___________ Gross Profit
Part B
Under the percentage of completion, method calculate for each year if you are over or under billed.
2014: _____________
2015: _____________
2016: _____________
PLEASE SHOW ALL YOUR WORK! THANKS IN ADVANCE!!
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