Group assignment week 3

# Group assignment week 3 - [(\$1,950,000 X 60%) – \$195,000]...

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(a) Computation of Recognizable Profit/Loss Percentage-of-Completion Method 2007 Costs to date (12/31/07) \$150,000 Estimated costs to complete 1,350,000 Estimated total costs \$1,500,000 Percent complete (\$150,000 ÷ \$1,500,000) 10% Revenue recognized (\$1,950,000 X 10%) 195,000 Costs incurred 150,000 Profit recognized in 2007 \$45,000 2008 Costs to date (12/31/08) 1,200,000 Estimated costs to complete 800,000 Estimated total costs 2,000,000 Contract price 1,950,000 Total loss 50,000 Total loss \$50,000 Plus gross profit recognized in 2007 45,000 Loss recognized in 2008 (\$95,000) or Percent complete (\$1,200,000 ÷ \$2,000,000) 60% Revenue recognized in 2008
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Unformatted text preview: [(\$1,950,000 X 60%) – \$195,000] \$975,000 Costs incurred in 2008 (\$1,200,000 – \$150,000) 1,050,000 loss to date 75,000 Loss attributable to 2009 20,000 Loss recognized in 2008 (\$95,000) 2009 revenue (\$1,950,000 – \$195,000 – \$975,000) \$780,000 2009 estimated costs 800,000 2009 loss (\$20,000) 2009 Costs to date (12/31/09) 2,100,000 Estimated costs to complete 2,100,000 Contract Price 1,950,000 Total loss \$150,000 Total loss \$150,000 Less: Loss recognized in 2008 95,000 Gross profit recognized in 2007-45,000 (\$50,000) Loss recognized in 2009 (\$100,000)...
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## This note was uploaded on 04/04/2012 for the course ACC 422 taught by Professor Susan during the Spring '08 term at University of Phoenix.

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