2014 2015 2016 (a) On March 1, 2014, Chance Company entered into a contract to b
ID: 2464737 • Letter: 2
Question
2014
2015
2016
(a)
On March 1, 2014, Chance Company entered into a contract to build an apartment building. It is estimated that the building will cost $2,057,000 and will take 3 years to complete. The contract price was $3,500,000. The following information pertains to the construction period.2014
2015
2016
Costs to date $678,810 $1,444,100 $2,190,000 Estimated costs to complete 1,378,190 618,900 –0– Progress billings to date 837,000 2,013,000 3,500,000 Cash collected to date 794,000 1,910,000 3,395,000Explanation / Answer
2014 2015 2016 Contract Price 3500000 3500000 3500000 Cost to date 678810 1444100 2190000 Estimated cost to complete 1378190 618900 0 Total Estimated Cost 2057000 2063000 2190000 Estimated Gross Profit 1443000 1437000 1310000 Percentage of Completion to date 33% 70% 100% Total Gross Profit Recognised 476190 1005900 1310000 Less Gross Profit recognised in Previous year 0 476190 1005900 Gross Profit - Current Year 476190 529710 304100
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