On March 1, 2012, Chance Company entered into a contract to build an apartment building. It is estimated that the building will cost $2,000,000 and will take 3 years to complete. The contract price was $3,000,000. The following information pertains to the construction period. Compute the amount of gross profit to be recognized on year 2014, assuming the percentage-of-completion method is used.

On March 1, 2012, Chance Company entered into a contract to build an apartment building. It is estimated that the building will cost $2,000,000 and will take 3 years to complete. The contract price was $3,000,000. The following information pertains to the construction period. Compute the amount of gross profit to be recognized on year 2014, assuming the percentage-of-completion method is used.

Accounting (Text Only)

26th Edition

ISBN:9781285743615

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter22: Budgeting

Section: Chapter Questions

Problem 22.22EX: Capital expenditures budget On January 1, 2016, the controller of Omicron Inc. is planning capital...

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