Percentage-of-completion and completed-contract methods. On March 15, 2016, Ambr

Question

Percentage-of-completion and completed-contract methods. On March 15, 2016, Ambrose Contractors agreed to construct a building at a contract price of $18,000,000. Ambrose's estimated total construction costs are $12,000,000 and the project would be finished in 2018. Information relating to the costs and billings for this contract is as follows: Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and tor completed-contract accounting, show the gross profit that should be recorded for 2.10, 2.01, and 2018

Explanation / Answer

2016 2017 2018 Total costs incurred to date $        3,000,000 $        9,450,000 $        12,300,000 estimated costs to complete $        9,000,000 $        3,150,000 $                         -   % complete 25.00% 75.00% 100.00% Gross Profit to date $        1,500,000 $        4,050,000 $          5,700,000 Gross Profit $        1,500,000 $        2,550,000 $          1,650,000 Under completed contract reenue and gross profit are deferred untill project completed completed contract 2016 $                       -   2017 $                       -   2018 $        5,700,000 % complete = Total construction costs to date/Total estimated costs of contract Gross profit to date = % complete X Total estimated gross profit Current year's gross profit = Gross profit to date - Gross profit in prior years

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