During 2017 Whispering Company started a construction job wi

During 2017, Whispering Company started a construction job with a contract price of $1,610,000. The job was completed in 2019. The following information is available 2017 2018 2019 Costs incurred to date Estimated costs to complete Billings to date Collections to date $410,000 $754,800 $1,067,000 90,000 355,200 297,000 899,000 1,610,000 272,000 818,000 1,437,000 Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. Gross profit recognized in 2017 $ Gross profit recognized in 2018 Gross profit recognized in 2019 s

Solution

*Various accounts is used to represent Material, Accounts Payable, Cash e.t.c

Completed Contract Method:

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	2017	2018	2019
Contract price	$        1,610,000	$ 1,610,000	$ 1,610,000
Actual cost to Date	$            410,000	$     754,800	$ 1,067,000
Estimated Cost to complete	$            590,000	$     355,200	$                 -
Total Estimated Cost	$        1,000,000	$ 1,110,000	$ 1,067,000
Estimated Gross Profit Contract Price- Estimated Cost)	$            610,000	$     500,000	$     543,000
% Completion	41%	68%	100%
Gross Profit Earned till Date	$            250,100	$     340,000	$     543,000
Gross Profit of Previous Year		$     250,100	$     340,000
Gross Profit recognised	$            250,100	$        89,900	$     203,000