Percentage of Completion Method for Long Term Contracts (Financial Accounting Tutorial #51)

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In the last video I gave a quick overview of the methods that we may use depending on how our company is structured (IFRS of ASPE) (besides the installment method).
I just wanted to quickly go through a problem and provide a template I used for determining revenue and gross profit. It's simple and quick and should help you when you are trying to figure out those numbers to record your journal entries.
Enjoy! If you have any questions, feel free to leave one below :)
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[@cwmasta1]

I appreciate you for posting this stuff for free! You make our lives easier as exams come up. Thanks for keeping it simple, to the point, and easy.

[@nickmccandless5530]

My prof made this so complicated. You made it so easy. Thanks!

[@abhinavbehl]

Best 10 minutes spent today. Super helpful. Thanks Dave.

[@yarielismorales2037]

Thank you, but how I find the $3,582,000 (Revenue to date)??? $9,000,000 x .392=3,528,000 not 3,582,000 is an error or it is that I don't understand?

[@addesom]

Yarielis Mora yes it is 3,528,000 not 3,582,000

[@samacctprson2249]

Thank you so much, this is very useful for my advance study! subscribed! :)

[@devans1650]

I just want to say thank you. you are a great teacher you made it so easy. I spent three hours on this one problem and with your clear teaching I understood it in 5 mins. Thank You

[@devans1650]

Thank You I am really Trying hard in this class.

[@devans1650]

I will. Thanks

[@antaradas8833]

I am right now struggling with LTC and this template is so much easier to follow. Thanks for sharing!

[@NotepirateDave]

Thanks for watching! Be sure to share with any of your classmates having difficulty 🤓

[@Marcus1961100]

Thanks for all your vids - they're great.

[@jesg9657]

excuse me sir. but i think you are wrong in solving the revenue to date. as what you've said it is equal to 9000000×0.392 which is equal to 3528000 not 3582000. kindly check your answer. thanks

[@rickjacoby4542]

This is great for understanding the concept but you have to know how to make the journal entries also and it doesn't address that at all.

[@zaralogy.8654]

Isn't Gross Profit equal to contract price minus total estimated costs?

[@timfink1494]

Hi, for monthly adjustments for WIP, what does the P%L look like? if I have a 100k WIP accrual in Jan, then reverse that out in Feb and have a 50K WIP by end of Feb, does that mean my P&L for the month of Feb will show a -50k for the WIP revenue line and a 100k WIP for the YTD? or should I reverse out every month? so, in this case, I would place a100k in Jan, then in Feb I would reverse that out in Jan and record a 50k plus in the month of Feb?

[@gennyjovellanos2531]

worth watching.. thank you..:)

[@matthewcampbell894]

You’re a blessing

[@dzole201]

Awesome! Thanks

[@ForodhaHouse]

it would be nice to include the journal entries..

[@jenniferg099]

Are you Canadian?

[@dflaco]

How do you calculate the gross profit margin?

[@NotepirateDave]

Gross margin is calculated by dividing Gross profit by total revenue.

[@chrisbowen2093]

Can't seem to access your quizzes.

[@chrisbowen2093]

***** Awesome. Is there a link to video (is it 50 or 51) a 12 minute video that video 52 makes reference to? I am learning about percentage of completion method. Not hard to understand while looking at the screen or my textbook, but we do not get to use notes during our exams. Trying to memorize the process.

[@chrisbowen2093]

***** I was watching one of the % of completion video and it started out saying"hopefully you had a chance to see the earlier video in our series" and made mention it was 12 minutes long, but I couldn't find one in that series that was 12 minutes long. I just plan on watching them all :-)

[@chrisbowen2093]

No worries mate! We all have lives.

[@lydiastamper7104]

but 39.2%*9000=3528

[@ReDEdgerReese]

I have the worst professor ever in college....

[@bmattiscool]

hey Einstein, revenue to date for 2014 is 3528000 not 3582000.

[@bmattiscool]

and that throws off most of your other numbers off, rendering this video useless...

[@1andycandy639]

***** Thank you. I caught that too but it could have been stated less aggressively. Your videos are helpful and easy to follow along with to catch such mistakes.

[@royetcasue3324]

9Mx39.2% is 352800000 not 3582.... hahaha