Beck Construction Company Began Work on a New Building Project

question 102

Essay

Beck Construction Company began work on a new building project on January 1, 2012. The project is to be completed by December 31, 2014, for a fixed price of $108 million. The following are the actual costs incurred and estimates of remaining costs to complete the project that were made by Beck's accounting staff: Required: What amount of gross profit (or loss) would Beck record on this project in each year under the percentage-of-completion method? Place answers in the spaces provided below and show supporting computations.

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Definitions:

Raw Materials

Basic substances in their natural, modified, or semi-processed state, used as inputs to a production process for manufacturing, finishing, or fabrication.

Producing Product

The process of creating, manufacturing, or assembling goods and services for sale to consumers.

Skills

The ability to do something well, typically gained through training or experience.

Knowledge

Information, understanding, and skills acquired through education or experience.