Espiritu Construction Co. has used the cost-to-cost percentage-of-completion method of recognizing revenue. Tony Espiritu assumed leadership of the business after the recent death of his father, Howard. In reviewing the records, Tony finds the following information regarding a recently completed building project for which the total contract was $2,000,000.
Espiritu wants to know how effectively the company operated during the last three years on this project and, because the information is not complete, has asked for answers to the following questions.
1. How much cost was incurred in 2011?
2. What percentage of the project was completed by the end of 2011?
3. What was the total estimated gross profit on the project by the end of 2011?
4. What was the estimated cost to complete the project at the end of2011?