Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. curtis construction inc., entered into a fixed-pri

Curtis Construction Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021,...

50.1K

Verified Solution

Question

Accounting

Curtis Construction Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-story
office building. At that time, Curtiss estimated that it would take between two and three years to complete the project.
the total contract price for construction of the building is $4,000,000. Curtis concludes that the contract does not qualify
for revenue recognition over time. the building was completed on december 31, 2023. Estimated percentage of completion
accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under
the contract were as follows:
At 12-31-21 At 12-31-22 At 12-31-23
Contract Price 4,000,000.00 4,000,000.00 4,000,000.00
Costs incurred to date 350,000.00 2,500,000.00 4,250,000.00
Estimated costs to complete 3,150,000.00 1,700,000.00 -
Total estimated costs 3,500,000.00 4,200,000.00 4,250,000.00
Estimated gross profit 500,000.00 (200,000.00) (250,000.00)

WHY in the answer of this question says that Gross profit (loss) recognized for 2021 was 0 when according to this schedule it as $500,000?

Thank you

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students