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E18-12B (Recognition of Profit on Long-Term Contracts)During 2014 AFCO started a construction job with a contract price of $2,500,000. The job was completed in 2016. The following information is available. 2014 2015 2016 Costs incurred to date $ 600,000 $

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E18-12B (Recognition of Profit on Long-Term Contracts)During 2014 AFCO started a construction job with a contract price of $2,500,000. The job was completed in 2016. The following information is available.;2014 2015 2016;Costs incurred to date $ 600,000 $1,435,000 $2,100,000;Estimated costs to complete 1,400,000 615,000 ?0?;Billings to date 100,000 500,000 2,500,000;Collections to date 100,000 300,000 2,000,000;Instructions;(a) Compute the amount of gross profit to be recognized each year assuming the percentage-ofcompletion method is used.;(b) Prepare all necessary journal entries for 2015.;(c) Compute the amount of gross profit to be recognized each year assuming the completed-contract method is used.

 

Paper#75360 | Written in 18-Jul-2015

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