Penner Builders Contracted to Build a High-Rise for $28,000,000

question 31

Essay

Penner Builders contracted to build a high-rise for $28,000,000. Construction began in 2014 and is expected to be completed in 2017. Data for 2014 and 2015 are: Penner uses the percentage-of-completion method.
Instructions
(a) How much gross profit should be reported for 2014? Show your computation.
(b) How much gross profit should be reported for 2015?
(c) Make the journal entry to record the revenue and gross profit for 2015.

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Definitions:

Appellate Court

A court that has the authority to review and decide on the appeals of decisions made by lower courts, ensuring the correct application of law.

Trial Court

A court of law where cases are first tried, evidence is presented, and judgments are made.

Jury

A group of people legally selected and sworn to inquire into any matter of fact and to give their verdict according to the evidence presented to them.

Standing

The legal right of a party to bring a lawsuit by demonstrating to the court sufficient connection to and harm from the law or action challenged (i.e., the plaintiff must demonstrate that he or she is harmed or will be harmed). Otherwise, the court will dismiss the case, ruling that the plaintiff “lacks standing” to bring the suit.