The contract is a non-cancellable fixed-price contract for $10 million. The following data pertain to the construction period (all figures in thousands). 2023 $3,800 Costs for the year 4,625 Estimated costs to complete Progress billings for the year (non-refundable) 3,470 Cash collected for the year (a) 2024 4,625 1,150 1,220 4,190 2025 3,110 4,240 -0- 2,540 2,850 The construction industry has experienced significant expansion, making construction materials and labour more costly than originally estimated. Crane finds it extremely difficult to estimate the costs to complete construction and therefore difficult to estimate the percentage complete. It must account for the construction project using the zero-profit method. Calculate the amount of the gross profit to be recognized each year of the contract. (Do not leave any answer field blank. Enter O for amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

The contract is a non-cancellable fixed-price contract for $10 million. The following data pertain to the construction period (all figures in thousands). 2023 $3,800 Costs for the year 4,625 Estimated costs to complete Progress billings for the year (non-refundable) 3,470 Cash collected for the year (a) 2024 4,625 1,150 1,220 4,190 2025 3,110 4,240 -0- 2,540 2,850 The construction industry has experienced significant expansion, making construction materials and labour more costly than originally estimated. Crane finds it extremely difficult to estimate the costs to complete construction and therefore difficult to estimate the percentage complete. It must account for the construction project using the zero-profit method. Calculate the amount of the gross profit to be recognized each year of the contract. (Do not leave any answer field blank. Enter O for amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

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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