Company's total assets and liabilities by the end of April

Total Assets (Cash only): $2,787,000

Total Liabilities: $1,863,000

Construction project

Contract terms

Duration: 4/1 ~ 12/31

Contract amount:

$624,000 with the owner

$598,000 with the subcontractors including the suppliers

Terms of payment:

Monthly payment

The owner pays the contractor within a month after the contractor bills the owner.

The owner holds 5% of each payment to the contractors for retention.

The contractor pays the subcontractors within a month after the subcontractors bill the contractor.

The contractor holds 5% of each payment to the subcontractors for retention.

Information related to revenues and expenses in the project

4/1 Project Start

4/26 The subcontractors billed $54,000 to the contractor.

4/30 The contractor billed $57,000 to the owner.

5/20 The owner paid 95% of the amount that the contractor billed in March to the contractor. 5% was held for retention.

5/20 The contractor paid 95% of the amount that the subcontractors billed in March to the subcontractors. 5% was held for retention.

5/26 The subcontractors billed $41,000 to the contractor.

5/31 The contractor billed $47,000 to the owner.

What is the amount of total assets on the balance sheet of May 31st?

Answer rating: 100% (QA)

We start by identifying a contract with a customer for revenue recognition the co... View the full answer