======================= Yr 1 ========== Yr 2 ========== Yr 3
1. Estimated Revenue--------------20000---------------20000-----------------20000
2. est. total costs----------------------16000--------------18000-----------------18000
=======================----------=======---------==========---------
3. est profit-----------------------------4000------------------2000-------------------2000
----------------------------------------------------------------------------------------------------
4. Cost incurred to date-----------8000------------------13500----------------18000
5. % of completion------------------50%-------------------75%-------------------100%
6. Recognized p/loss for the yr--2000-----------------(500)-------------------500
7. Cum. recognized p/loss-------2000-----------------1500--------------------2000
i can not understand the 500 proft recognized in year 3, in line #6, Yr 3.
pls explain.
thank u
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construction contract worked example
10y ago#1What was the overall profit on the contract?
And how much cumulative profit has been recognised up to the end of year 2?
So how much profit remains to be recognised in year 3?
Does that do it for you?
yes it does.. thank u...
interesting point: u dont see at least 40% of my posts. why? because as i am typing the question to u, it forces me to be clear on what i DONT understand. and just being forced to clearly write the question, i end up understanding it!
10y ago#3Well that's certainly a good thing!
Why not try with the other 60%? Ie write them out and then ..... write them out again! Maybe second time through you'll crack the problem :-))
Seriously, keep posting and together we can sort it out
60% i cant crack .. but will surely make an effort..:)
10y ago#5Ok, you learn better when you work it out for yourself
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