Answer Happy

On July 1, 2020, Headland Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,880,000. On July 1, Headland estimated that it would take between 2 and 3 years to complete the building. On December 31, 2022, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2020, 2021, and 2022. At 12/31/20 At 12/31/21 At 12/31/22 Contract costs incurred to date $315,000 $1,103,200 $2,078,900 Estimated costs to complete the contract 1,185,000 866,800 -0- Billings to Gumbel 300,000 1,090,000 1,830,000 (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, 2020, 2021, and 2022. (Ignore income taxes.) (if answer is 0, please enter O. Do not leave any field blank. If an amount should be deducted then enter the amount using either a negative sign prececeding the number e.g. -45 or parenthesis eg. (45).) 2020 Costs to date (12/31/20) 315,000 Estimated Costs to Complete 1,185,000 Estimated Total Costs $ 1,500,000 Percent Complete 21 %
Revenue Recognized $ 394,800 Costs Incurred -315,000 Profit/(Loss) Recognized in 2020 $ 79.800 2021 Costs to date (12/31/21) $ 1,103,200 Estimated Costs to Complete 866.800 Estimated Total Costs 7 1,970,000 Contract Price - 1,880,000 Total Profit/Loss $ 90,000 Total Profit/Loss $ 90,000 Gross Profit Recognized in 2020 79,800 Profit/(Loss) Recognized in 2021 $ 169,800
2022 Costs to date (12/31/22) $ 2,078,900 Estimated Costs to Complete 2,078,900 2,078900 Estimated Total Costs 1,880,000 Contract Price BADO O ALO Total Profit/Loss - 198,900 Total Profit/Loss $ - 169800 Profit/(Loss) Recognized in 2020 79800 -90,000 Profit/(Loss) Recognized in 2022 - 108,900
2021 Contract Price 188,000 Estimated Costs to Complete 1,970,000 Profit/(Loss) Recognized in 2021 $ -90,000 2022 Contract Price $ 1,880,000 Costs Incurred 2,078,900 Total Profit/(Loss) on Contract - 198,900 Profit/(Loss) Recognized in 2021 -90,000 Total Profit/(Loss) on Contract $ -108,900