Wildhorse Construction Inc., which has a calendar year end, has entered into a non-cancellable fixed-price contract for $2.5 million beginning September 1, 2023, to build a road for a municipality. It has been estimated that the road construction will be complete by June 2025. The following data pertain to the construction period. Costs to date Estimated costs to complete Progress billings to date (non-refundable) Cash collected to date (a) 2023 2024 $645,000 $1,496,250 498.750 727,000 2,000,000 545.000 1.853,000 1.505.000 2025 $2,050,000 0 2.500.000 2.500,000 Using the percentage-of-completion method, calculate the estimated gross profit that would be recognized during each year of the construction period. (Enter negative amounts using either a negative sign preceding the number eg -45 or parentheses eg (45) Round answers to 0 decimal places, eg. 5,275)

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Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.