Whispering Construction Company has entered into a contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $596,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $905,000. The following data pertain to the construction period. Costs to date Estimated costs to complete Progress billings to date Cash collected to date 2020 $250,320 345,680 273,000 243,000 2021 $464,880 131.120 554,000 504,000 2022 $608,000 -0- 905,000 905,000
Whispering Construction Company has entered into a contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $596,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $905,000. The following data pertain to the construction period. Costs to date Estimated costs to complete Progress billings to date Cash collected to date 2020 $250,320 345,680 273,000 243,000 2021 $464,880 131.120 554,000 504,000 2022 $608,000 -0- 905,000 905,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
L 13
Transcribed Image Text:(a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the
construction period. (If answer is 0, please enter O. Do not leave any fields blank.)
Gross profit recognized in 2020
Gross profit recognized in 2021
Gross profit recognized in 2022
$
$
(b) Using the completed-contract method, compute the estimated gross profit that would be recognized during each year of the
construction period. (If answer is 0, please enter O. Do not leave any fields blank.)
Gross profit recognized in 2021
Gross profit recognized in 2022
Gross profit recognized in 2020 $
$
$
Transcribed Image Text:Whispering Construction Company has entered into a contract beginning January 1, 2020, to build a parking complex. It has been
estimated that the complex will cost $596,000 and will take 3 years to construct. The complex will be billed to the purchasing company
at $905,000. The following data pertain to the construction period.
Costs to date
Estimated costs to complete
Progress billings to date.
Cash collected to date
2020
$250,320
345,680
273,000
243,000
2021
$464,880
131.120
554,000
504,000
2022
$608,000
-0-
905,000
905,000
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