On July 1, 2017, Headland Construction Company Inc. contracted to build an office building for...
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Accounting
On July 1, 2017, Headland Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,890,000. On July 1, Headland estimated that it would take between 2 and 3 years to complete the building. On December 31, 2019, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2017, 2018, and 2019.
At12/31/17
At12/31/18
At12/31/19
Contract costs incurred to date
$312,900
$1,148,400
$2,076,000
Estimated costs to complete the contract
1,177,100
831,600
0
Billings to Gumbel
300,000
1,090,000
1,850,000
(a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2017, 2018, and 2019
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