Inexperienced construction company pronghorn corp

Subject:AccountingPrice: Bought3

Share With

Inexperienced construction company pronghorn corp. signed a risky non-cancellable contract to build a research facility at a fixed contract amount or $2,500,000. The work began in early 2020 and pronghorn incurred costs of $1,125,000. At December 31, 2020, the estimated future costs to complete the project totaled $1,125,000. During 2021, pronghorn ran into trouble with weather conditions and incurred the expected costs of $1,125,000 and estimated that it would need to spend an additional $350,000 to complete the project. During 2022, pronghorn reluctantly completed the project, incurring further costs of $355,000.

Calculate the amount of gross profit or loss that should be recognized each year under the percentage-of- completion method. Round percent complete to 2 decimal places, e.g. 12.34%.