Assignment Task: Nash Construction Company has entered into a contract beginning January 1, 2017, to build a parking complex. It has been estimated that the complex will cost $599,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $905,000. The following data pertain to the construction period.
|
|
2017
|
2018
|
2019
|
|
Costs to date
|
$257,570
|
$413,310
|
$609,000
|
|
Estimated costs to complete
|
341,430
|
185,690
|
-0-
|
|
Progress billings to date
|
270,000
|
551,000
|
905,000
|
|
Cash collected to date
|
240,000
|
501,000
|
905,000
|
Required:
Question 1: Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period.
Question 2: Using the completed-contract method, compute the estimated gross profit that would be recognized during each year of the construction period.