Question

JRE2 Inc. entered into a contract to install a pipeline for a fixed price of $2,245,000. JRE2 recognizes revenue upon contract completion.

Cost incurred Estimated Cost to Complete
2020 $ 256,000 $ 1,580,000
2021 1,630,000 533,000
2022 480,000 0

In 2022, JRE2 would report gross profit (loss) of:

Answer 1

Step-by-step explanation:

In 2022,

Contract Price 2,245,000

Less: Cost incurred

2020 (256,000)

2021 (1,580,000)

2022 (630,000)

Gross Margin (145,000)