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On February 1, 2014, Marsh Contractors agreed to construct a building at a contract price...

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Accounting

On February 1, 2014, Marsh Contractors agreed to construct a building at a contract price of $5,800,000. Marsh estimated total costs would be $4,000,000 and the project would be finished in 2016. Information relating to the costs and billings for this contract is as follows;

2014 2015 2016

Total costs incurred to date $1,500,000 $2,640,000 $4,600,000

Estimated cost to complete 2,500,000 1,760,000 -0-

Customer billings to date 2,200,000 4,000,000 5,600,000

Collections to date 2,000,000 3,500,000 5,500,000

Instructions

Fill in the correct amounts on the following schedule. For percent-of -completion accounting and for completed-contract accounting. Show your computations for the gross profit that should be recorded for 2014, 2015, and 2016.

Percentage-0f-Completion Completed-Contract

Gross Profit Gross profit

2014 ------------------------------------ 2014 --------------------------------

2015 ------------------------------------- 2015 --------------------------------

2016 ------------------------------------ 2016 -------------------------------

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