Crane Construction Company has entered into a non-cancellable contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $650,000 and will take three years to construct. The complex will be billed to the purchasing company at $970,000. The following data pertain to the construction period.

		2020		2021		2022
Costs to date		$292,500		$487,500		$660,000
Estimated costs to complete		357,500		162,500		0
Progress billings to date (non-refundable)		292,500		600,000		970,000
Cash collected to date		262,500		550,000		970,000

(A) 

Using the percentage-of-completion method, calculate the estimated gross profit that would be recognized during each year of the construction period. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		2020		2021		2022
Gross profit / (loss)		$		$		$

(B) 

Using the completed-contract method, calculate the estimated gross profit that would be recognized during each year of the construction period. (Do not leave any answer field blank. Enter 0 for amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		2020		2021		2022
Gross profit / (loss)		$		$		$

Answer rating: 100% (QA)

Solution 1 Computation of of completion revenue recognition and Gross Profit Cra... View the full answer