→ required: Fill in the following two tables: Percent of completion Year 2022 2023 2024 Total revenues Total cost Gross profit Account receivable balance Zero profit method Year 2022 2023 2024 Total revenues Total cost
→ required: Fill in the following two tables: Percent of completion Year 2022 2023 2024 Total revenues Total cost Gross profit Account receivable balance Zero profit method Year 2022 2023 2024 Total revenues Total cost
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 61P
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Transcribed Image Text:→ required: Fill in the following two tables:
Percent of completion
Year
2022
2023
2024
Total revenues
Total cost
Gross profit
Account receivable
balance
Zero profit method
Year
2022
2023
2024
Total revenues
Total cost
Gross profit
Transcribed Image Text:Starks firm wanted to construct a new parking lot and storage area and for that reason
they signed a 5 Million contract with Lannister company limited. The work began during
March 2022 and the project was completed by the end of 2024. You have the following
notes related to each year:
Year 1: at the end of 2022 the estimated total cost for the contract was 4,000,000 in
which one quarter incurred by the end of 2022. The company billed the contractor with
30%(70% of billed amount was collected during the year)
Year 2: at the end of 2023 total estimated cost increased by 30 % from last year
estimations and the company's cost to date were 3 Million. The company billed the
contractor with 70% in both years (year 1 and year2) (70% of billed amount was
collectedduring year 1 and year 2)
Year 3: the company finished the contract with total cost of 5.4 Million. The remaining
of unbilled revenues was billed during the last year and only 5% remained uncollected.
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