(Solution) - Mauer Construction Company Inc entered into a firm fixed pric -(2025 Original AI-Free Solution)

Paper Details

Mauer Construction Company, Inc., entered into a firm fixed-price contract with Giovanna Trillini Clinic on July 1, 2007, to construct a four-story office building. At that time, Mauer estimated that it would take between 2 and 3 years to complete the project. The total contract price for construction of the building is $4,500,000. Mauer appropriately accounts for this contract under the completed-contract method in its financial statements and for income tax reporting. The building was deemed substantially completed on December 31, 2009. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to the Trillini Clinic under the contract were as follows.

Instructions
Prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2007, 2008, and 2009. Ignore income taxes. Show supporting computations in good form.
(AICPAadapted)