Megacorp uses the cost-to-cost ratio to apply the percentage of completion method. It is currently early 2021.

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Megacorp uses the cost-to-cost ratio to apply the percentage of completion method. It is currently early 2021. The following table provides information relating to one of its projects so far. The contract price is $45 million.

Required:

Compute the amount of revenue and gross profit that Megacorp should recognize in each of 2019 and 2020.

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Intermediate Accounting Volume 1

ISBN: 9780135236109

4th Edition

Authors: Kin Lo, George Fisher

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Question Posted: Mar 04, 2023 09:30 AM

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Megacorp uses the cost-to-cost ratio to apply the percentage of completion method. It is currently early 2021.

Question:

(Amounts in $ millions) Cost incurred to date Additional costs to complete estimated at year-end Total estimated cost 2019 $ 12 28 40 2020 $ 30 18 48 2021 Not avail. Not avail.

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Intermediate Accounting Volume 1

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