Question - Percentage-of-completion method.
Dalton Construction Co. contracted to build a bridge for $5,000,000. Construction began in 2010 and was completed in 2011. Data relating to the construction are:
2010 2011
Costs incurred $1,650,000 $1,375,000
Estimated costs to complete 1,350,000 -
Dalton uses the percentage-of-completion method.
Instructions
(a) How much revenue should be reported for 2010? Show your computation.
(b) Make the entry to record progress billings of $1,650,000 during 2010.
(c) Make the entry to record the revenue and gross profit for 2010.
(d) How much gross profit should be reported for 2011? Show your computation.