Sunshine Bhd. entered a contract to build a building for its customer with the agreed total price of $3,200,000. The project is expected to last for 3 years with the total cost of $1,600,000. The following table shows the progress of the work: 31 Dec 201831 Dec 201931 Dec 2020Completion (Market Value)$950,000$2,600,000$3,200,000Cost incurred to date$400,000$1,000,000$1,600,000Required:For each year, compute the recognized profit based on input method.For each year, compute the recognized profit based on output method. Please answer required 1,2

Cost incurred during the year 2019 = $1,000,000 - $400,000 = $600,000 Cost incurred during the year…

Answered: Sunshine Bhd. entered a contract to…

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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Sunshine Bhd. entered a contract to build a building for its customer with the agreed total price of $3,200,000. The project is expected to last for 3 years with the total cost of $1,600,000. The following table shows the progress of the work:

	31 Dec 2018	31 Dec 2019	31 Dec 2020
Completion (Market Value)	$950,000	$2,600,000	$3,200,000
Cost incurred to date	$400,000	$1,000,000	$1,600,000

Required:

For each year, compute the recognized profit based on input method.
For each year, compute the recognized profit based on output method. Please answer required 1,2

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