Required information [The following information applies to the questions display

Question

Required information [The following information applies to the questions displayed below.] Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,780,000. The project was begun in 2017 and completed in 2018. Cost and other data are presented below: 2017 2018 Costs incurred during the year $ 458,500 $ 1,080,000 Estimated costs to complete 851,500 0 Billings during the year 495,000 1,285,000 Cash collections during the year 395,000 1,440,000 Assume that Beavis recognizes revenue upon completion of the project.

Required: Compute the amount of gross profit recognized during 2017 and 2018. (Leave no cells blank - be certain to enter "0" wherever required.)

Explanation / Answer

2017 Cost Incured During the Period 458500 Estimated costs to complete 8,51,500 Prior Cost Total Estimated Cost 13,10,000 % of Completion =485000/1336500 35.00% Estimated Gross Profit 1780000-131000 4,70,000 Gross Profit to be Recognized 470000*35% 164500 2018 Cost Incured During the Period 1080000 Estimated costs to complete 0 Prior Cost 458500 Total Estimated Cost 1538500 Estimated Gross Profit 1780000-1538500 241500 Gross Profit to be Recognized 241500-164500 77000

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