Question

A construction company entered into a fixed-price contract to build an office building for $30 million. Construction costs incurred during the first year were $10 million and estimated costs to complete at the end of the year were $15 million. During the first year the company billed its customer $11 million, of which $3 million was collected before year-end. What would appear in the year-end balance sheet related to this contract using the percentage-of-completion method? (Enter you answers in whole dollars.) % Answer is complete but not entirely correct. Assets: Accounts receivable Costs plus profit in excess of billings $ 2,000,000 X $ 2,000,000

Answer 1

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	Assets:
	Accounts receivables	=	$           8,000,000
	Costs plus profit in excess of billings	=	$           1,000,000
	Workings:
	Amount billed	=	$       1,10,00,000
Less:	Amount collected	=	$         -30,00,000
	Accounts receivables	=	$           80,00,000
	Total Revenue	=	$       3,00,00,000
Less:	Total Estimated cost	=	$      -2,50,00,000
	Total Estimated Profit	=	$           50,00,000
	Percentage of completion in first year ($10 million / $25 million)	=	40%
	Profit recognized in first year ($50 million X 40%)	=	$           20,00,000
	Cost plus profit ($10 million + $2 million)	=	$       1,20,00,000
Less:	Amount billed	=	$       1,10,00,000
	Cost plus profit in excess of billings	=	$           10,00,000

Answer 2

I actually hate people that put 2 zeros in the middle comma set. Fucking die honestly, that is standard literally nowhere