Shumpert, Inc. entered into a contract that was to take two years to complete, with an estimated cost of $2,257,600. The contract price was $3,160,640. Costs of the contract for 2014, the first year, totaled $1,693,200. a. What was the gross profit reported by the percentage of completion method for 2014?

Shumpert, Inc. entered into a contract that was to take two years to complete, with an estimated cost of $2,257,600. The contract price was $3,160,640. Costs of the contract for 2014, the first year, totaled $1,693,200. a. What was the gross profit reported by the percentage of completion method for 2014?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 6P

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Concept explainers

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.

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a. What was the gross profit reported by the percentage of completion method for 2014?

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