Question1 On July 1, 2017, Teal Construction Company Inc. contracted to build an

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Question1 On July 1, 2017, Teal Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,920,000. On July 1, Teal estimated that it would take between 2 and 3 years to complete the building. On December 31, 2019, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2017, 2018, and 2019 At At At 12/31/17 12/31/18 12/31/19 Contract costs incurred to date Estimated costs to complete the contract Billings to Gumbel $312,900 $1,096,200 $2,139,000 933,800 1,177,100 290,000 1,110,000 1,880,000 (a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2017, 2018, and 2019. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any field blank.) 2017 Costs to date (12/31/17) 312900 Estimated Costs to Complete 1177100 Estimated Total Costs 1467100 Percent Complete Revenue Recognized Costs Incurred 312900 Profit/Loss) Recognized in 2017$

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1. Percentage Complete method 2017 2018 2019 Cost to Date 312900 1096200 2139000 Estimated cost to complete 1177100 933800 0 Estimated total Cost 1490000 2030000 2139000 Contract Price 1920000 1920000 % Complete (Cost to date/Estimated total cost) 21 Revenue Recognize (Contract Price*%) 403200 Cost Incurred 312900 Profit Recognized (Revenu-Cost) 90300 Total Loss till 2018 -110000 -219000 Less:Profit Recognized in 2017 90300 90300 Add:Loss Recognized in 2018 -200300 Loss Recognized in 2018 -200300 -109000 1. Completed contract method 2017: No Revenue Recognition 2018: Contract Price 1920000 Less: Estimated Cost 2030000 Loss Recognized -110000 2019: Contract Price 1920000 Less: Estimated Cost 2139000 Total Loss -219000 Les: Recognized in 2018 -110000 To be recognized in 2019 -109000

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