McDermott International, Inc. is an integrated provider of engineering, construction, and installation solutions to the energy industry. In its 10-K for fiscal year 2018, the company disclosed the following information about its contracts with customers: We have contracts that extend beyond one year. Most of our long-term contracts have provisions for progress payments… Revenues for our contracts that satisfy the criteria for over-time recognition are recognized as the work progresses. We generally recognize our contract revenues and related costs on a percentage-of-completion basis… We measure transfer of control utilizing an input method to measure progress of the performance obligation based upon the cost-to-cost measure of progress, as it best depicts the transfer of assets to the customer… The company’s consolidated balance sheet is summarized here: December 31, 2018 2017 (In $ millions) Assets Current assets: Cash and cash equivalents Accounts receivable Contracts in prog The line item for “Contracts in progress” most likely represents what? -The total of ‘accounts receivable’ less ‘construction in progress’ on long-term contracts with customers in which ‘accounts receivable’ is greater than ‘construction in progress. -The total of ‘billings on construction in progress’ less ‘construction in progress’ on long-term contracts with customers in which ‘billings on construction in progress’ is greater than ‘construction in progress. -The total of ‘construction in progress’ less ‘billings on construction in progress’ on long-term contracts with customers in which ‘construction in progress’ is greater than ‘billings on construction in progress.’ -The total of ‘construction in progress’ less ‘accounts receivable’ on long-term contracts with customers in which ‘construction in progress’ is greater than ‘accounts receivable.’

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The Contracts in progress denotes the costs and profits recognized that ... View the full answer