On February 1,2007, Nance Contractors agreed to construct a building at a contract price of

On
February 1,2007, Nance Contractors agreed to construct a building at a
contract price of $6,000,000. Nance estimated total construction costs
would be $4,000,000 and the project would be finished in 2009.
Information relating to the costs and billings for this contract is as
follows:

2007

2008

2009

Total costs incurred to date

$1,500,000

$2,640,000

$4,600,000

Estimated costs to complete

$2,500,000

$1,760,000

0

Customer billings to date

$2,200,000

$4,000,000

$5,600,000

Collections to date

$2,000,000

$3,500,000

$5,500,000

Instructions
Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and for completed-contract accounting, show the gross profit that should berecorded for 2007.
Percentage-of-Completion Completed-Contract
Gross Profit Gross Profit
2007 2007
2008 2008
2009 2009
Percentage of completion method and completed contract methods.