Sunland Construction Company has entered into a non-cancellable contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $625,000 and will take three years to construct. The complexwill be billed to the purchasing company at $930,000. The following data pertain to the construction period. 2022 $468,750 $635,000 2020 2021 Costs to date $281,250 Estimated costs to complete 343,750 156,250 Progress billings to date (non-refundable) 281,250 575,000 930,000 Cash collected to date 251,250 525,000 930,000
Sunland Construction Company has entered into a non-cancellable contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $625,000 and will take three years to construct. The complexwill be billed to the purchasing company at $930,000. The following data pertain to the construction period. 2022 $468,750 $635,000 2020 2021 Costs to date $281,250 Estimated costs to complete 343,750 156,250 Progress billings to date (non-refundable) 281,250 575,000 930,000 Cash collected to date 251,250 525,000 930,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1.Using the percentage-of-completion method, calculate the estimated gross profit that would be recognized during each year of the construction period
2020 $___________
2021 $____________
2022 $_____________
2. Using the completed-contract method, calculate the estimated gross profit that would be recognized during each year of the construction period
2020 $___________
2021 $___________
2022 $___________
Transcribed Image Text:Sunland Construction Company has entered into a non-cancellable contract beginning January 1, 2020, to build a parking complex.
It has been estimated that the complex will cost $625,000 and will take three years to construct. The complex will be billed to the
purchasing company at $930,000. The following data pertain to the construction period.
2020
2021
2022
Costs to date
$281,250
$468,750
$635,000
Estimated costs to complete
343,750
156,250
Progress billings to date (non-refundable)
281,250
575,000
930,000
Cash collected to date
251,250
525,000
930,000
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