The XYZ Construction Company was awarded a contract for $3,150,000 to build a new building XYZ estimates the cost to complete the contract at $2,700,000. The contract period was 36 months starting January 1, 2010. XYZ uses the cost to cost method of recognizing revenues under the percent of completion method. A schedule of construction activities for the years 2010-2012 follows: Yr. Costs incurred to date Est cost to complete Billings Collection 2010 1,225,000 1,475,000 1,415,000 1,300,000 2011 2,240,000 410,000 1,000,000 1,130,000 2012 2,640000 0 735,000 720,000 Calculate XYZ's gross profit for each year (2010, 2011, and 2012).
The XYZ Construction Company was awarded a contract for $3,150,000 to build a new building XYZ estimates the cost to complete the contract at $2,700,000. The contract period was 36 months starting January 1, 2010. XYZ uses the cost to cost method of recognizing revenues under the percent of completion method.
A schedule of construction activities for the years 2010-2012 follows:
Yr. Costs incurred to date Est cost to complete Billings Collection
2010 1,225,000 1,475,000 1,415,000 1,300,000
2011 2,240,000 410,000 1,000,000 1,130,000
2012 2,640000 0 735,000 720,000
Calculate XYZ's gross profit for each year (2010, 2011, and 2012).
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