中级财务会计ch3.pptVIP

The T-accounts for the percentage-of-completion method are illustrated on this slide. Notice that the gross profit recognized in each period is added to the construction in progress account. Income statements are more informative if the sales revenue and cost components of gross profit are reported rather than the net figure alone. So, the income statement for each year will report the appropriate revenue and cost of construction amounts. For example, in 2013, the gross profit of $500,000 consists of revenue of $2,000,000 (40% of the $5,000,000 contract price) less the $1,500,000 cost of con