Question
Hardhat Contractors received a contract to construct a bridge for $4,500,000. Construction was begun in 2014...
Hardhat Contractors received a contract to construct a bridge for $4,500,000. Construction was begun in 2014 and completed in 2015. Cost and other data are presented below:
| 2014 | 2015 | |
| Costs incurred during the year | 1,500,000 | 2,700,000 |
| Estimated costs to complete | 2,500,000 | - |
| Billings during the year | 1,900,000 | 2,500,000 |
| Cash collections during that year | 1,700,000 | 2,600,000 |
Assume that Hardhat Contractors uses the percentage-of-completion method for revenue recognition. Compute the amount of gross profit recognized during 2014 and 2015.
| 2014 | 2015 | |
| Contract price | ||
| Actual costs to date | ||
| Estimated costs to complete | ||
| Total estimated costs | ||
| Gross profit | ||
| Now compute the percent completed: | 2014 | 2015 |
| Costs to date/total estimated costs= | ||
| Gross profit | ||
| Previously recognized | ||
| Gross profit year | ||
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