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Sage Construction Company has entered into a contract beginning January 1, 2020, to build a parking complex. It has been that the complex will cost $604,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $902,000. The following data pertain to the construction period. 2020 2021 2022 Costs to date $253,680 $489,240 $613,000 Estimated costs to complete 350,320 114,760 -0- Progress billings to date 271,000 553,000 902,000 Cash collected to date 241,000 503,000 902,000 (a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter O. Do not leave any fields blank.)

Sage Construction Company has entered into a contract beginning January 1, 2020, to build a parking complex. It has been that the complex will cost $604,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $902,000. The following data pertain to the construction period. 2020 2021 2022 Costs to date $253,680 $489,240 $613,000 Estimated costs to complete 350,320 114,760 -0- Progress billings to date 271,000 553,000 902,000 Cash collected to date 241,000 503,000 902,000 (a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter O. Do not leave any fields blank.)

FINANCIAL ACCOUNTING
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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Sage Construction Company has entered into a contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $604,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $902,000. The following data pertain to the construction period. 2020 2021 2022 Costs to date $253,680 $489,240 $613,000 Estimated costs to complete 350,320 114,760 -0- Progress billings to date 271,000 553,000 902,000 Cash collected to date 241,000 503,000 902,000 (a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter 0. Do not leave any fields blank.) Gross profit recognized in 2020 $ Gross profit recognized in 2021 $ Gross profit recognized in 2022 $ (b) Using the completed-contract method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter O. Do not leave any fields blank.) Gross profit recognized in 2020 $ Gross profit recognized in 2021 $
Transcribed Image Text:Sage Construction Company has entered into a contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $604,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $902,000. The following data pertain to the construction period. 2020 2021 2022 Costs to date $253,680 $489,240 $613,000 Estimated costs to complete 350,320 114,760 -0- Progress billings to date 271,000 553,000 902,000 Cash collected to date 241,000 503,000 902,000 (a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter 0. Do not leave any fields blank.) Gross profit recognized in 2020 $ Gross profit recognized in 2021 $ Gross profit recognized in 2022 $ (b) Using the completed-contract method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter O. Do not leave any fields blank.) Gross profit recognized in 2020 $ Gross profit recognized in 2021 $
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