Simpson Construction entered into a contract to construct a floating bridge across a lake.The contract price for the bridge is $7,500,000.During 2012,costs of $1,800,000 were incurred representing 30% of total expected costs.
Prepare the necessary entries for 2014 to recognize gross profit for the year assuming the firm uses the
(1)completed-contract method.
(2)percentage-of-completion method.

Question

Quizplus · Accepted Answer

The Answer of Simpson Construction entered into a contract to construct a floating bridge across a lake.The contract price for the bridge is $7,500,000.During 2012,costs of $1,800,000 were incurred representing 30% of total expected costs.
Prepare the necessary entries for 2014 to recognize gross profit for the year assuming the firm uses the
(1)completed-contract method.
(2)percentage-of-completion method.

Simpson Construction Entered into a Contract to Construct a Floating