Sunshine Bhd. entered a contract to build a building for its customer with the agreed total price of $3,200,000. The project is expected to last for 3 years with the total cost of $1,600,000. The following table shows the progress of the work: 31 Dec 2018 31 Dec 2019 31 Dec 2020 Completion (Market Value) $950,000 $2,600,000 $3,200,000 Cost incurred to date $400,000 $1,000,000 $1,600,000 Required: For each year, compute the recognized profit based on input method. For each year, compute the recognized profit based on output method.
Sunshine Bhd. entered a contract to build a building for its customer with the agreed total price of $3,200,000. The project is expected to last for 3 years with the total cost of $1,600,000. The following table shows the progress of the work: 31 Dec 2018 31 Dec 2019 31 Dec 2020 Completion (Market Value) $950,000 $2,600,000 $3,200,000 Cost incurred to date $400,000 $1,000,000 $1,600,000 Required: For each year, compute the recognized profit based on input method. For each year, compute the recognized profit based on output method.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 19RE
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Question
Sunshine Bhd. entered a contract to build a building for its customer with the agreed total price of $3,200,000. The project is expected to last for 3 years with the total cost of $1,600,000. The following table shows the progress of the work:
31 Dec 2018 |
31 Dec 2019 |
31 Dec 2020 |
|
Completion (Market Value) |
$950,000 |
$2,600,000 |
$3,200,000 |
Cost incurred to date |
$400,000 |
$1,000,000 |
$1,600,000 |
Required:
- For each year, compute the recognized profit based on input method.
- For each year, compute the recognized profit based on output method. Please answer required 1,2
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