WestCoast Co.started a contract in June 2017 to build a bridge at a fixed price of $14 million.The bridge was to be completed by October 2019.Total cumulative costs incurred by the end of December 2017 and 2018 were $2 million and $6 million,respectively.WestCoast Co.is unable to estimate the total costs of the project prior to completion.Final costs at the end of the project totaled $11 million.
Required:
Determine the amount of revenue,cost of sales,and gross profit WestCoast Co.would report in 2017,2018,and 2019.
Definitions:
FOB Shipping Point
A term in shipping agreements where the buyer is responsible for the goods and their transportation cost as soon as they leave the seller's premises.
Ownership of Merchandise
The legal right or title to goods and inventory held by a business for sale.
Multiple-Step Income Statement
A detailed financial statement that separates operating revenues and expenses from non-operating ones, providing insights into a company's financial activities.
Gross Profit
The difference between sales revenue and the cost of goods sold before deducting operating expenses.
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