Question: In 2024, Long Construction Corporation began construction work under a three-year contract. The contract price is $1,600,000. Long recognizes revenue over time according to percentage

In 2024, Long Construction Corporation began construction work under a three-year contract. The contract price is $1,600,000. Long recognizes revenue over time according to percentage of completion for financial reporting purposes. The financial statement presentation relating to this contract at December 31, 2024, is as follows:

Balance Sheet Accounts receivable (from construction progress billings) Construction in progress Less:

Required:
1. What was the cost of construction actually incurred in 2024?
2. How much cash was collected in 2024 on this contract?
3. What was the estimated cost to complete as of the end of 2024?
4. What was the estimated percentage of completion used to calculate revenue in 2024?

Balance Sheet Accounts receivable (from construction progress billings) Construction in progress Less: Billings on construction contract Cost and profit of uncompleted contracts in excess of billings Income Statement Income (before tax) on the contract recognized in 2024 $100,000 (94,000) $30,000 6,000 $20,000

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