Question
During 2020, Indigo Corporation started a construction job with a contract price of $5.46 million. Indigo...
During 2020, Indigo Corporation started a construction job with a contract price of $5.46 million. Indigo ran into severe technical difficulties during construction but managed to complete the job in 2022. The contract is non-cancellable. Under the terms of the contract, Indigo sends billings as revenues are earned. Billings are non-refundable. The following information is available
Costs incurred to date
2020 : $780,000
2021: $2,730,000
2022: $5,360,000
Estimated costs to complete:
2020: $4,095,000
2021: $2,730,000
2022: $ -0-
Required: Calculate the amount of gross profit
that should be recognized each year under the
percentage-of-completion method. (Enter negative
amounts using either a negative sign preceding the number e.g. -45
or parentheses e.g. (45).)
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