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    Lacey0916's Avatar
    Lacey0916 Posts: 9, Reputation: 1
    New Member
    		  
    #1

    Oct 16, 2014, 12:22 PM
    Accounting/ Completed contract method
    Bob entered into a 3-yr construction contract on 4/13/2005. Contract price $12,000 and the Complete contract method is used.
    Calculate the amount of gross profit to be recognized in each of the 3 years. Please show all work/formulas.
    Cost Incurred:
    2005- $4,000
    2006- $4,000
    Estimated Costs- yet to be incurred
    2005-$6,000
    2006- $5,600
    The project was completed in 2007 with additional costs of 5,800 were incurred.

    My answer:
    2005- $ 2006- $0 2007- ($1,800 )
    Does this look correct?
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
    Ultra Member
    		  
    #2

    Oct 19, 2014, 10:38 PM
    Using the matching concept

    2005 costs 10000, 2006 costs 11600 2007 cost 5800
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