Chapter 18 demo problem percentage of completion

Chapter 18 demo problem percentage of completion -...

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Long-Term Contracts Demonstration Problem Blues Construction Company built an office building for a customer. The customer agreed on a contract price of $3,000,000, and Blues estimated the construction would cost $2,600,000. Blues uses the percentage-of-completion method to recognize profit on its’ projects. The following data relate to the construction period. Year Costs Incurred – Current Yr Est. Costs To Complete Billings To Customer Collections on Billings 2004 $1,040,000 $1,560,000 $1,000,000 $800,000 2005 1,060,000 650,000 900,000 850,000 2006 750,000 0 1,100,000 1,250,000 2,850,000 3,000,000 2,900,000 1
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Blue’s Construction Company % of completion method 2004 2005 2006 Total Revenues A 3,000,000 3,000,000 3,000,000 Cost-to-date B 1,040,000 2,100,000 2,850,000 Cost-to-comp C 1,560,000 650,000 0 Total cost D (B+C) 2,600,000 2,750,000 2,850,000 Gross profit E (A-D) 400,000 250,000 150,000 % complete – cumulative F (B/D) 40% 76.36% 100% (1,040/2,600) (2,100 /2,750) (2,850/2,850) Cumulative
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This note was uploaded on 09/23/2009 for the course THTR 3515 taught by Professor Nelson during the Spring '09 term at LSU.

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Chapter 18 demo problem percentage of completion -...

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