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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
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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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 2024 Costs for the year $3,800 Estimated costs to complete 4,625 Progress billings for the year (non-refundable) 3,470 4,190 Cash collected for the year 3,110 4,240 (a) 2025 4,625 1,150 1,220 -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).)
Transcribed Image Text: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 2024 Costs for the year $3,800 Estimated costs to complete 4,625 Progress billings for the year (non-refundable) 3,470 4,190 Cash collected for the year 3,110 4,240 (a) 2025 4,625 1,150 1,220 -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).)
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