Exercise 6-29 (Part Level Submission) Sandhill Construction Company uses the percentage-of-completion method of accounting. In 2017, Sandhill began work under a non-cancellable contract #E2-D2, which provided for a contract price of $2,024,000. Other details follow: 2017 2018 Costs incurred during the year $588,800 $1,311,000 Estimated costs to complete, as at December 31 883,200 0 Billings during the year (non-refundable) 386,400 1,545,600 Collections during the year 322,000 1,380,000 Collapse question part (a) How much revenue should be recognized in 2017 and in 2018? 2017 2018 Revenue $ $ SHOW LIST OF ACCOUNTS Attempts: 0 of 4 used SAVE FOR LATER SUBMIT ANSWER
Solution:
| Computation of % of completion, revenue recognition and Gross Profit - Sandhill Construction Company | |||||||
| Year | Actual cost incurred (A) | Total cost incurred till date (B) | Total estimated Cost ( C ) | % of completion (D) (B/C) | Contract Price (E) |
Total Revenue to be recoganized (F) (E * D) | Revenue for current period (G) |
| 2017 | $588,800 | $588,800 | $1,472,000 | 40.00% | $2,024,000 | $809,600 | $809,600 |
| 2018 | $1,311,000 | $1,899,800 | $1,899,800 | 100.00% | $2,024,000 | $2,024,000 | $1,214,400 |
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