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  • Oct 16, 2014, 12:22 PM
    Lacey0916
    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?
  • Oct 19, 2014, 10:38 PM
    paraclete
    Using the matching concept

    2005 costs 10000, 2006 costs 11600 2007 cost 5800

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