Manchester Victorian construction Inco. Signed a new contract on the 10th of May, 2020. The...
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Accounting
Manchester Victorian construction Inco. Signed a new contract on the 10th of May, 2020. The contracted is assigned with a price of 8.4 million and the company expects that it will take approximately 3 to 4 years to complete the project. The following are the related cost, billing and collection over years 2020-2023:
| 2020 | 2021 | 2022 | 2023 | |
| Cost during the year | $1,100,000 | $2,570,000 | $3,162,000 | $1,388,000 |
| Cost to complete | $5,100,000 | $3,750,000 | $1,728,000 | - |
| Billing During the year | $1,000,000 | $2,000,000 | $4,000,000 | $1,500,000 |
| Collection during the year | $800,000 | $1,750,000 | $3,000,000 | $2,950,000 |
You are required to calculate the revenues, construction expense, accumulated cost and gross profit for each year under both methods:
Percent of completion method
| 2020 | 2021 | 2022 | 2023 | |
| Revenues | ||||
| Construction expense | ||||
| Gross profit or loss | ||||
| Accumulated actual cost |
Zero profit method
| 2020 | 2021 | 2022 | 2023 | |
| Revenues | ||||
| Construction expense | ||||
| Gross profit or loss | ||||
| Accumulated actual cost |
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