Question: Al Buraimi Construction Company has a contract to construct a OMR 4,500,000 bridge at an estimated cost of OMR 4,000,000. The contract is to start
Al Buraimi Construction Company has a contract to construct a OMR 4,500,000 bridge at an estimated cost of OMR 4,000,000. The contract is to start in July 2020, and the bridge is to be completed in October 2022. The following data pertain to the construction period.
| Details | 2020 | 2021 | 2022 |
| Costs to date | OMR 1,000,000 | OMR 2,916,000 | OMR 4,050,000 |
| Estimated costs to complete | 3,000,000 | 1, 134,000 | -0- |
| Progress billings during the year | 900,000 | 2,400,000 | 1,200,000 |
| Cash collected during the year | 750,000 | 1,750,000 | 2,000,000 |
Instructions:
(a). Using the percentage-of-completion method for long-term contracts, compute the estimated revenue, gross profit that would be recognized during each year of the construction period.
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