Roe Construction Company uses the percentage-of-completion method of accounting. In 2021, Roe began work on a contract it had received which provided for a contract price of $15,000,000. Other details follow: 2021Costs incurred during the year$7,200,000Estimated costs to complete as of December 314,800,000Billings during the year6,600,000Collections during the year3,900,000 What should be the gross profit recognized in 2021?

Under the Percentage of completion method, the revenue is recognized at different stages as agreed…

Answered: Roe Construction Company uses the…

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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Roe Construction Company uses the percentage-of-completion method of accounting. In 2021, Roe began work on a contract it had received which provided for a contract price of $15,000,000. Other details follow:

	2021
Costs incurred during the year	$7,200,000
Estimated costs to complete as of December 31	4,800,000
Billings during the year	6,600,000
Collections during the year	3,900,000

What should be the gross profit recognized in 2021?

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