Using Percentage-of-Completion and Completed Contract Methods
Halsey Building Company signed a contract to build an office building for $60,000,000. The scheduled construction costs follow.
Year Cost
2016 $12,000,000
2017 18,000,000
2018 10,000,000
Total $40,000,000
The building is completed in 2018.
For each year, compute the revenue, expense, and gross profit reported for this construction project using each of the following methods.
a. Percentage-of-completion method
2016 2017 2018
Revenue $Answer $Answer $Answer
Expense $Answer $Answer $Answer
Gross Profit $Answer $Answer $Answer
b. Completed contract method
2016 2017 2018
Revenue $Answer $Answer $Answer
Expense $Answer $Answer $Answer
Gross Profit $Answer $Answer $Answer