The contract is a non-cancellable fixed-price contract for $10 million. The following data pertain to the construction period (all figures in thousands). 2023 $3,800 Costs for the year 4,625 Estimated costs to complete Progress billings for the year (non-refundable) 3,470 Cash collected for the year (a) 2024 4,625 1,150 1,220 4,190 2025 3,110 4,240 -0- 2,540 2,850 The construction industry has experienced significant expansion, making construction materials and labour more costly than originally estimated. Crane finds it extremely difficult to estimate the costs to complete construction and therefore difficult to estimate the percentage complete. It must account for the construction project using the zero-profit method. Calculate the amount of the gross profit to be recognized each year of the contract. (Do not leave any answer field blank. Enter O for amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

The contract is a non-cancellable fixed-price contract for $10 million. The following data pertain to the construction period (all figures in thousands). 2023 $3,800 Costs for the year 4,625 Estimated costs to complete Progress billings for the year (non-refundable) 3,470 Cash collected for the year (a) 2024 4,625 1,150 1,220 4,190 2025 3,110 4,240 -0- 2,540 2,850 The construction industry has experienced significant expansion, making construction materials and labour more costly than originally estimated. Crane finds it extremely difficult to estimate the costs to complete construction and therefore difficult to estimate the percentage complete. It must account for the construction project using the zero-profit method. Calculate the amount of the gross profit to be recognized each year of the contract. (Do not leave any answer field blank. Enter O for amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

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 18RE

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