Question: Cullumber Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments

Cullumber Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1600000 each quarter. The total contract price is $18654000 and Cullumber estimates total costs of $17800000. Cullumber estimates that the building will take 3 years to complete, and commences construction on January 2, 2021. At December 31, 2021, Cullumber estimates that it is 40% complete with the construction, based on costs incurred. What is the total amount of Revenue from Long-Term Contracts recognized for 2021 and what is the balance in the Accounts Receivable account assuming Cannon Company has not yet made its last quarterly payment?

Revenue

Accounts Receivable

$7120000

$1600000

$7461600

$1600000

$7120000

$6218000

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