On February 1, 2010, Marcos Contractors agreed to construct a building at a cont

Question

On February 1, 2010, Marcos Contractors agreed to construct a building at a contract price of $3,000,000. Marcos estimated total construction costs would be $2,000,000 and the project would be finished in 2012. Information relating to the costs and billings for this contract is as follows: ? 2010?? 2011?? 2012? Total costs incurred to date?$ 750,000?$1,320,000?$2,300,000 Estimated costs to complete?1,250,000? 880,000?-0- Customer billings to date?1,100,000? 2,000,000?3,000,000 Collections to date?1,000,000? 1,750,000?2,950,000

1: Prepare all entries for 2010, 2011, and 2012 for Marco.

Explanation / Answer

SOLUTION:-

CALCULATIONS ARE AS FOLLOWS:-

(( A$ 750,000 / $ 2000,000) X $ 1000,000 ) = $ 375,000

(( B$ 1,320,000 / $ 2,200,000) X $ 800,000 ) = $ 480,000

MINUS 2010 GROSS PROFIT $ 375,000 2011 GROSS PROFIT $ 105,000

CTOTAL REVENUE $ 3,000,000 TOTAL COSTS   $ 2,300,000 TOTAL GROSS PROFIT   $ 700,000 RECOGNIZED TO DATE $ 480,000 2012 GROSS PROFIT $ 220,000

DTOTAL REVENUE $ 3,000,000 TOTAL COSTS   $ 2,300,000 TOTAL GROSS PROFIT $ 700,000

(SOLVED)

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PERCENTAGE OF COMPLETION COMPLETED CONTRACT GROSS PROFIT YEAR GROSS PROFIT YEAR 2010 $ 375,000A 2010 0 2011 $ 105,000B 2011 0 2012 $ 220,000C 2012 $ 700,000

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