Compare the four primary methods of construction accounting discussed in this chapter and compute the reported revenue, expenses, and income or profit for each, for a contractor which has only one project for the whole year as reflected in the following. Assume January 1 through December 31 fiscal periods. Ignore any retention or tax considerations for this exercise. The reporting date is 12/31/2019.

• Contract volume of $1 million.

• Included in the contract value is a 5% fee.

• $500,000 was invoiced and received as of 11/30/2019.

• All invoice values include a proportional share of fee.

• An additional $100,000 is invoiced as of 12/31/2019, due 1/10/2020.

• $450,000 has been paid by the GC in labor, material, and subcontractor expenses through 12/15/2019.

• $90,000 was invoiced by subcontractors and suppliers for month ending 12/31/2019,

payable ten days after receipt of payment from the client. That is factored into this month’s $100,000 pay request.

•  The balance of the construction costs will be paid in full by 3/31/2020 by the client to the GC and the GC to its subcontractors and suppliers and craftsmen.

•  Theoretically the contractor’s expenses will exactly equal its estimated costs, but it never happens this way.