2014 2015 2016 a During 2014 Nilsen Company started a constr

2014

2015

2016

(a)

During 2014, Nilsen Company started a construction job with a contract price of $1,736,000. The job was completed in 2016. The following information is available. 2014 2015 2016 Costs incurred to date $395,200 $846,880 $1,078,000 Estimated costs to complete 592,800 225,120 –0– Billings to date 280,100 879,300 1,736,000 Collections to date 231,100 835,500 1,408,000

Solution

Percentage cpmpletion stage 2014 2015 2016 Cost to date 395200 846880 1078000 Estimated cost to complete 592800 225120 0 Total cost 988000 1072000 1078000 Estimated completion stage 40% 79% 100% (Cost to date/ Total cost)*100 Gross profit to be recognized 2014 2015 2016 Contract price 1736000 1736000 1736000 Less: Estimated Total cost 988000 1072000 1078000 Gross Profit for the contract 748000 664000 658000 % percentage completion 40% 79% 100% Grofit to be recognized 299200 524560 658000 Less: Gross profit recognized in earlierr years 0 299200 524560 Gross profit recognized in current year 299200 225360 133440 Year Gross recognized 2014 299200 2015 225360 2016 133440