Problem:
On March 1, 2012, Chance Company entered into a contract to build an apartment building. It is estimated that the building will cost $2,172,000 and will take 3 years to complete. The contract price was $3,121,000. The following information pertains to the construction period.
|
|
2012
|
|
2013
|
|
2014
|
| Costs to date |
|
$673,320 |
|
$1,602,840 |
|
$2,014,000 |
| Estimated costs to complete |
|
1,498,680 |
|
563,160 |
|
-0- |
| Progress billings to date |
|
855,000 |
|
1,853,000 |
|
3,121,000 |
| Cash collected to date |
|
810,000 |
|
1,707,000 |
|
3,009,000
|
Required:
Question: Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
Note: Please show the work not just the answer.