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)

FINANCIAL ACCOUNTING
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Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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
2025
$645,000 $1,496,250 $2,050,000
1,505.000
498.750
727,000 2,000,000
545,000 1853,000
2024
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)
Transcribed Image Text: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 2025 $645,000 $1,496,250 $2,050,000 1,505.000 498.750 727,000 2,000,000 545,000 1853,000 2024 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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