Question 29
In 2013, Thomas Jefferson contracted to build an airplane for $12,000,000. Data relating to the contract are as follows:
($ in thousands)
2013 2014
Costs incurred during the year................................. $2,000 $6,000
Estimated costs to complete as of year-end................ 6,000 -
Billings during the year .......................................... 6,000 6,000
Cash collections during the year............................... 5,000 7,000
Determine the gross profit that Thomas Jefferson should recognize in both 2013 and 2014 using the percentage-of-completion method.