Question: PLEASE SHOW ALL WORK AND EXPLAIN, THANK YOU Scroll down to complete all parts of this task. On January 1, Year 1, Cumulus Contracting, Inc.,
PLEASE SHOW ALL WORK AND EXPLAIN, THANK YOU
Scroll down to complete all parts of this task.
On January 1, Year 1, Cumulus Contracting, Inc., entered into an agreement to construct a building on the customer's land. The project was expected to take 3 years and involve a total cost of $6,000,000. The client has agreed to pay Cumulus $9,000,000 upon completion of the building. Cumulus determined that revenue from this contract is recognized over time. Cumulus uses the input method based on costs incurred to measure progress toward completion of the contract.
The following information about the costs of the project are taken from the accounting records of Cumulus.
| Year 1 | Year 2 | Year 3 | |
| Costs incurred during year | $1,000,000 | $3,000,000 | $4,000,000 |
| Expected future costs | $5,000,000 | $4,000,000 | $0 |
Enter the appropriate amounts in the designated cells below. Enter all amounts as positive values. Round all amounts to the nearest whole number. If no entry is necessary, enter a zero (0).
| Gross profit for year | Answer |
| 1. Year 1 | |
| 2. Year 2 | |
| 3. Year 3 |
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