Scribd
Upload
46 views5 pages

Conxtruction Ontract

This document discusses accounting methods for construction projects, including: 1) The percentage of completion method, which recognizes revenue and costs over time based on the percentage of the project completed. 2) The zero profit method, which recognizes no profit until the project is complete to avoid overstating revenue and profits. 3) Examples calculating construction in progress, costs incurred, billings, and estimated costs to complete for several projects between 2016-2018.

Uploaded by

Alexandrite
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
46 views5 pages

Conxtruction Ontract

This document discusses accounting methods for construction projects, including: 1) The percentage of completion method, which recognizes revenue and costs over time based on the percentage of the project completed. 2) The zero profit method, which recognizes no profit until the project is complete to avoid overstating revenue and profits. 3) Examples calculating construction in progress, costs incurred, billings, and estimated costs to complete for several projects between 2016-2018.

Uploaded by

Alexandrite
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 5

1D

2A
3A
4D
A Construction in progress - percentage method

Revenue for the year


Revenue recognized from last year
Cost of construction
Gross profit of the year
progress billing
construction in progress-2017

B Construction in progress - Zero profit method

Cost Incurred - 2017


Cost Incurred - 2018
Construction in progress
Billing to client
Construction in progress net of billing

Cc tOTAL CONTRACT PRICE


COST INCURRED TO DATE
550,000.00
75,000.00
(600,000.00)
25,000.00
550,000.00
575,000.00

(600,000.00)
(75,000.00)
(675,000.00)
550,000.00
(125,000.00)

975,000.00 Progress Billing-2018 275,000.00


(1,050,000.00) Construction in progress net of b (125,000.00)
(75,000.00) Construction in progress net of b (125,000.00)
25,000.00 25,000.00
(50,000.00)
2016 2017 2018
Construction in Progress 441,000.00 ? ?
Estimated cost to complete ? ? -
Cost Incurred 425,250.00 969,000.00 675,750.00
Excess of construction in progress over billing (84,000.00) (330,750.00) -

A. Estimated cost to complete-2016


Contract Price
Cost incurred
Excess of construction in progress over billing
Estimated Cost to complete

B. Realized Profit/Loss-2017 Total contract price


Cost incurred
Estimated total contract cost
Realized profit/loss

Construction in progress Contract Price


Cost incurred
Excess of construction in progress over billing
Estimated Cost to complete
Cost Incurred
Estimated Total contract cost
Percentage of Completion

Gross profit earned


Gross Profit earned in previous year
Construction in progress
2,100,000.00
(425,250.00)
ess over billing (84,000.00)
1,590,750.00

2,100,000.00
(969,000.00)
(800,250.00)
330,750.00

2,100,000.00
(969,000.00)
ess over billing (330,750.00)
800,250.00
969,000.00
1,769,250.00
54.77%

1,480,898.37
(441,000.00)
1,039,898.37

You might also like