Manchester Victorian construction Inco. Signed a new contract on the 5th of April, 2019. The...
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Manchester Victorian construction Inco. Signed a new contract on the 5th of April, 2019. The contracted is assigned with a price of 8.5 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 2019-2022: 2022 $1,388,000 Cost during the year Cost to complete Billing During the year Collection during the year 2019 $1,200,000 $5,100,000 $1,000,000 $800,000 2020 $2,550,000 $3,750,000 $2,000,000 $1,750,000 2021 $3,162,000 $1,728,000 $4,000,000 $3,000,000 $1,500,000 $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 2019 2020 2021 2022 Revenues Construction expense Gross profit or loss Accumulated actual cost Zero profit method 2019 2020 2021 2022 Revenues Construction expense Gross profit or loss Accumulated actual cost
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