High-End Contractors won a contract to build a new business school worth a total of $45,000,000. The
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Question:
High-End Contractors won a contract to build a new business school worth a total of $45,000,000. The company initially estimates that the total cost for building the school is $34,400,000 and that it will take 4 years to complete. However, just prior to the preparation of the financial statements for Year 2, the company revises the cost estimate to $37,000,000.
Information concerning actual costs for years 1 & 2 are provided below.
Year 1 | Year 2 | |
Costs incurred during the year | $10,600,000 | $15,400,000 |
How much revenue should High-End recognize during Year 1 & Year 2 if High-End uses the percentage of completion method?
Expert Answer:
Lets determine the revenue that HighEnd should recognize during Year 1 and Year 2 ... View the full answer
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