Question:
The following data relates to a construction job started by Syl Co. during 2013:
Total contract price $100,000
Actual costs during 2013 20,000
Estimated remaining costs 40,000
Billed to customer during 2013 30,000
Received from customer during 2013 10,000
Under the percentage-of-completion method, how much should Syl recognize as gross profit for 2013?
a. $26,667
b. $0
c. $13,333
d. $33,333
Answer:
c.
2013 actual costs $20,000
Total estimated costs ÷ 60,000
Ratio = 1/3
Contract price x 100,000
Revenue 33,333
2013 actual costs –20,000
Gross profit $13,333
The following data relates to a construction job started by Syl Co. during 2013:
Total contract price $100,000
Actual costs during 2013 20,000
Estimated remaining costs 40,000
Billed to customer during 2013 30,000
Received from customer during 2013 10,000
Under the percentage-of-completion method, how much should Syl recognize as gross profit for 2013?
a. $26,667
b. $0
c. $13,333
d. $33,333
Answer:
c.
2013 actual costs $20,000
Total estimated costs ÷ 60,000
Ratio = 1/3
Contract price x 100,000
Revenue 33,333
2013 actual costs –20,000
Gross profit $13,333
