Padfot company signed a long term contract to construct a new 4 buildings complex which will start
Question:
Padfot company signed a long term contract to construct a new 4 buildings complex which will start by the beginning of 2020 and it is expected to last for 4 years. The company sealed a contract price total of 10.8 million. You have the following information related to the performance of each year:
→ At the end of 2020: the company incurred actual cost total of $1,650,000 which represents 25% of estimated total cost at the end of 2020. Billed the customer with 15% and collected 50% of the billed amount to date
→ At the end of 2021: the company incurred actual cost total of 5,448,000 in both 2020 and 2021. Which represented 60% of estimated total cost at the end of 2021. Billed the customer with 50% to date and collected 80% of this amount in both 2020 and 2021
→ at the end of 2022: the company incurred actual cost total of 8,800,000 which represented 80% of estimated total cost at the end of 2022. Billed the customer with 80% to date and collected 80% of this amount in 2020,2021 and 2022.
→ at the end of 2023: the company finished the project with total cost of 11,500,000. Billed the rest of the amount and collected 95% by the end of year 4 of the entire billed amount.
You are required to answer the following using percent of completion:
How much revenue should be recognized during 2020?
How much revenue should be recognized during 2021?
How much revenue should be recognized during 2022?
How much revenue should be recognized during 2023?
How much is the construction expense for 2020?
How much is the construction expense for 2021?
How much is the construction expense for 2022?
How much is the construction expense for 2023?
How much is the balance of Account receivable at the end of 2020?
How much is the balance of Account receivable at the end of 2021?
How much is the balance of Account receivable at the end of 2022?
How much is the balance of Account receivable at the end of 2023?
How much is balance of Construction in process at the end 2020?
How much is balance of Construction in process at the end 2021?
How much is balance of Construction in process at the end 2022?
How much is balance of Construction in process at the end 2023?
Expert Answer:
ANSWER How much revenue should be recognized during 2020 10800000 X 15 1620000 How much revenue shou... View the full answer
