Question

Penner Builders contracted to build a high-rise for $27,000,000.Construction began in 2014 and is expected to be completed in 2017.Data for 2014 and 2015 are:

 

 

2014

 

2015

Costs incurred to date

 

$3,500,000

 

$9,880,000

Estimated costs to complete

 

14,000,000

 

9,120,000

 

Penner uses the percentage-of-completion method.

How much gross profit should be reported for 2014?

How much gross profit should be reported for 2015?

Make the journal entry to record the revenue and gross profitfor 2015.

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