Long-term Contracts

Clorad Corp. contracts with a customer to construct a building. It appropriately determines that it has one performance obligation which is satisfied over time. Using the following information for Year 1, compute Clorad's (a) total estimated costs for the contract, (b) revenue to date, and (c) gross profit recognized.

Year 1 (of 4-year project):
Construction costs incurred during the year	$174,000
Estimated costs to complete the contract	426,000
Partial billings to customers	100,000
Collections from customers	25,000
Total contract price	1,000,000

(a) Total estimated costs for the contract
(b) Revenue to date
(c) Gross profit recognized