400 > 2 In 2011, Huxley Corp. began construction work under a three-year contract. The contract price is $800,000. Huxley used the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of costs incurred to total estimated costs for completing the contract. The financial presentations relating to this contract at December 31, 2014, appear below. Balance Sheet Accounts receivable--construction contract billings Construction in progress Less contract billings Cost of uncompleted contract in excess of billings Income (before tax) on the contract recognized in year 1 c. $47,000 d. $50,000 ANS: A How much cash was collected in 2014 on this contract? $32,000 Construction costs b. $35,000 Revenue from IT contracts CIP Income Statement A/R Progress Billings carlo Asset $50,000 (47,000) $15,000 3,000 $10,000

In 2011, Huxley Corp. began construction work under a three-year contract. The contract price is $800,000. Huxley used the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of costs incurred to total estimated costs for completing the contract. The financial presentations relating to this contract at December 31,2014, appear below