September 2023 E18 4B Recognition of Profit on Long Term Contracts During 2007 AFCO started a construction job with

2024 E18-4B (Recognition of Profit on Long-Term Contracts) During 2007 AFCO started a construction job with a contract price of Assignment Help

E18 4B Recognition of Profit on Long Term Contracts During 2007 AFCO started a construction job with 2023

E18-4B (Recognition of Profit on Long-Term Contracts) During 2007 AFCO started a construction job with a contract price of $2,500,000. The job was completed in 2009. The following information is available. 2007 2008 2009 Costs incurred to date $ 600,000 $1,435,000 $2,100,000 Estimated costs to complete 1,400,000 615,000 –0– Billings to date 100,000 500,000 2,500,000 Collections to date 100,000 300,000 2,000,000 Instructions (a) Compute the amount of gross profit to be recognized each year assuming the percentage-of completion method is used. (b) Prepare all necessary journal entries for 2008. (c) Compute the amount of gross profit to be recognized each year assuming the completed-contract method is used.

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