1. a. Compute the gross profit recognized in each year.
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3. b. Assume that on December 31,2019 , costs to complete are estimated at $1,904 instead of $1,224 Calculate the cumulative PC for 2019 and determine the gross profit recognized for 2019 ?

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A project begins in January 2018 and it is expected to be completed in October 2020. The contract price is $4,500, and the estimated total cost is $4,000. [Thus, the estimated total profit is $500] 2018 $800 2019 $2,856 1,224 Costs to date [CTD] Costs to complete [CTC] Total cost [TC] Percentage [PC] ?? ?? The cumulative percentage of completion [PC] = CTD/TC 3,200 4,000 4,080 ?? 2020 $4,080 0 4,080 100% A project begins in January 2018 and it is expected to be completed in October 2020. The contract price is $4,500, and the estimated total cost is $4,000. [Thus, the estimated total profit is $500] 2018 $800 2019 $2,856 1,224 Costs to date [CTD] Costs to complete [CTC] Total cost [TC] Percentage [PC] ?? ?? The cumulative percentage of completion [PC] = CTD/TC 3,200 4,000 4,080 ?? 2020 $4,080 0 4,080 100%

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To calculate the gross profit recognized in each year we need to determine the percentage of complet... View the full answer