Question & Answer: In 2008 Shamrock Construction Ltd agreed to construct a hospital at a price of £1,000,000. The information relating t…..

In 2008 Shamrock Construction Ltd agreed to construct a hospital at a price of £1,000,000. The information relating to the costs and billings for this contract is as follows. Calculate the gross profit to be recognized in 2008 using the Percentage of Completion method.

2008 2009 2010

Cash incurred to date 280,000 600,000 785,000

Estimated costs yet to be incurred 520,000 200,000 –

Customer billing to date 150,000 400,000 1,000,000

Collection of billing to date 120,000 320,000 940,000