A construction company entered into a fixed-price contract to build an office building for $36 million. Construction costs incurred during the first year were $9 million, and estimated costs to complete at the end of the year were $21 million. The company recognizes revenue over time according to percentage of completion. During the first year the company billed its customer $9 million, of which $6 million was collected before year-end. What would appear in the year-end balance sheet related to this contract? Note: Enter your answers in whole dollars and not in millions (Le., $4 million should be entered as $4,000,000). Assets Balance Sheet (Partial)
A construction company entered into a fixed-price contract to build an office building for $36 million. Construction costs incurred during the first year were $9 million, and estimated costs to complete at the end of the year were $21 million. The company recognizes revenue over time according to percentage of completion. During the first year the company billed its customer $9 million, of which $6 million was collected before year-end. What would appear in the year-end balance sheet related to this contract? Note: Enter your answers in whole dollars and not in millions (Le., $4 million should be entered as $4,000,000). Assets Balance Sheet (Partial)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Brief Exercise 6-34 (Algo) Long-term contract; revenue recognition over time; balance sheet [LO6-8, 6-9]
A construction company entered into a fixed-price contract to build an office building for $36 million. Construction costs incurred
during the first year were $9 million, and estimated costs to complete at the end of the year were $21 million. The company recognizes
revenue over time according to percentage of completion.
During the first year the company billed its customer $9 million, of which $6 million was collected before year-end.
What would appear in the year-end balance sheet related to this contract?
Note: Enter your answers in whole dollars and not in millions (.e., $4 million should be entered as $4,000,000).
Assets:
Balance Sheet (Partial)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F18c48f75-db4f-470e-a220-102cceb01c6a%2F9e873327-2f5d-4df0-8eb2-b0d2627270a5%2Fmjtloke_processed.png&w=3840&q=75)
Transcribed Image Text:Brief Exercise 6-34 (Algo) Long-term contract; revenue recognition over time; balance sheet [LO6-8, 6-9]
A construction company entered into a fixed-price contract to build an office building for $36 million. Construction costs incurred
during the first year were $9 million, and estimated costs to complete at the end of the year were $21 million. The company recognizes
revenue over time according to percentage of completion.
During the first year the company billed its customer $9 million, of which $6 million was collected before year-end.
What would appear in the year-end balance sheet related to this contract?
Note: Enter your answers in whole dollars and not in millions (.e., $4 million should be entered as $4,000,000).
Assets:
Balance Sheet (Partial)
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