McCombs Contractors received a contract to construct a mental health facility for $2,500,000. Construction was begun in 2009 and completed in 2010. Cost and other data are presented below:
2009 2010
Costs inccured during the year $1,500,000 $1,300,000
Estimated costs to complete $1,200,000 -0-
Billings during the year $1,200,000 $1,300,000
Cash Collections during the year $1,000,000 $1,500,000
Assume that McCombs uses the percentage-of-completion Method for revenue recognition
1 ) What is the amount of gross profit recognized during 2009 and 2010
2) Prepare all journal entries to record costs, billings, collections, and profit recognition.
Assume that McCombs uses Completed Contract Method
1) What is the amount of gross profit recognized during 2009 and 2010