{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}


The contractor has incurred 25 3000001200000 of all

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: r has incurred 25% (300000/1200000) of all costs expected to be incurred on the project . if the percentage of completion method being used the contractor will recognize 25% of the profit that will be earned on the project the total profit is expected to be $800000 ($2000000-$1200000) and $200000 (25%*800000) of profit should be recognized in the first year 2)at the end of the second year . the company has incurred total cost of $900000 ($300000 in the first year and $600000 in the second year ) given that an additional $600000 of cost is expected to be incurred in the future the total cost of the project is expected to be $1500000($900000+$600000) and the new estimate of total profit is $ 500000($2000000contract price -$1500000of costs) if the project is 60% complete after year 2 ($900000-$1500000) 60%of all profit should be recognized by the end of year 2 or $300000(60%*$500000) because $200000 was recognized in the first year .$100000 remains to be recognized in year 2 3) at the end of the third year .total cost s a...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online