On June 15, 2022, Eagles Construction Inc.(Eagles) signed a $360,000 contract to build a small building. Eagles estimated that the total cost would be $320,000. Construction started immediately because the required completion date was July 31, 2023. Eagles's relevant data relating to this construction project were as follows:

                                                          2022            2023

Actual costs incurred $                120,000     $ 204,000

Estimated costs to complete      200,000               -0-

Progress billings                           112,000       248,000

Collections                                    110,000           250,000

Instructions

Calculate how much gross profit that Eagles should recognize each year, assuming:

a) Completed contract

b) Percentage-of-completion

Answer rating: 100% (QA)

a Completed Contract Method Under the completed contract method revenue expenses and gross profit ar... View the full answer