Percentage of completion method


Cummings is a construction company and uses the percentage of completion method. In 2013 they signed a contract to complete a job for $2,000,000. The estimated costs to complete were $1,800,000. At the end of 2013, costs of $540,000 were incurred and the estimated costs to complete are $1,260,000. In 2014 additional costs of $940,000 were incurred and costs to complete were $370,000. How much profit is shown in 2013 and in 2014?

a) $60,000 in 2013, $100,000 in 2014

b) $60,000 in 2013, $60,000 in 2014

c) $0 in 2013 and $0 in 2014

d) $60,000 in 2013 and $47,633

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Accounting Basics: Percentage of completion method
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