EXERCISE 18-4 (20-25 minutes)
(a) Gross profit recognized in:
| 2004 | 2005 | 2006 | |||
Contract price | | $1,500,000 | | $1,500,000 | | $1,500,000 |
Costs: | | | | | | |
Costs to date | $400,000 | | $935,000 | | $1,070,000 | |
Estimated costs to complete | 600,000 | 1,000,000 | 165,000 | 1,100,000 | 0 | 1,070,000 |
Total estimated profit | | 500,000 | | 400,000 | | 430,000 |
Percentage completed to date | | 40%* | | 85%** | | 100% |
Total gross profit recognized | | 200,000 | | 340,000 | | 430,000 |
Less: Gross profit recognized in previous years | | 0 | | 200,000 | | 340,000 |
Gross profit recognized in current year | | $ 200,000 | | $ 140,000 | | $ 90,000 |
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