Problem 18-11
On July 1, 2017, Nash Construction Company Inc. contracted tobuild an office building for Gumbel Corp. for a total contractprice of $1,890,000. On July 1, Nash estimated that it would takebetween 2 and 3 years to complete the building. On December 31,2019, the building was deemed substantially completed. Followingare accumulated contract costs incurred, estimated costs tocomplete the contract, and accumulated billings to Gumbel for 2017,2018, and 2019.
| | At
12/31/17 | | At
12/31/18 | | At
12/31/19 |
| Contract costs incurred to date | | $312,900 | | $1,148,400 | | $2,076,000 |
| Estimated costs to complete the contract | | 1,177,100 | | 831,600 | | –0– |
| Billings to Gumbel | | 300,000 | | 1,090,000 | | 1,850,000 |
(a) Using the percentage-of-completion method,prepare schedules to compute the profit or loss to be recognized asa result of this contract for the years ended December 31, 2017,2018, and 2019. (Ignore income taxes.) (If answer is 0,please enter 0. Do not leave any field blank. Enter negativeamounts using either a negative sign preceding the number e.g. -45or parentheses e.g. (45).)
