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?
