Frank & Dogg Construction Corporation obtained a $12,500,000 contract during 2019. The following data pertains to the
Question:
Frank & Dogg Construction Corporation obtained a $12,500,000 contract during 2019. The following data pertains to the construction period:
| 2019 | 2020 | 2021 |
Costs during the year | $ 3,500,000 | $ 4,005,000 | $ 4,000,000 |
Estimated costs to complete | $ 8,500,000 | $ 4,600,000 | $ 1,200,000 |
Billings | $ 6,250,000 | $0 | $0 |
Frank & Dogg uses the percentage of completion method. Costs incurred relative to the total project costs are used to measure the percentage of completion at the end of the year.
Required:
a) For the years 2019, 2020 and 2021 calculate the following:
Revenue realized
Costs realized
Profit or loss realized
b) How will the project be presented in 2019 on Frank & Dogg's Statement of Financial Position (asset or liability and for what amount).
Expert Answer:
a To calculate the revenue costs and profit or loss realized for each year using the percentage of c... View the full answer
College Accounting Chapters 1-30
ISBN: 978-0077862398
14th edition
Authors: John Price, M. David Haddock, Michael Farina
