A construction company entered into a fixed-price contract to build an office building for $44 million. Construction costs incurred during the first year were $14 million and estimated costs to complete at the end of the year were $21 million. The building was completed during the second year. Construction costs incurred during the second year were $22 million. How much revenue and gross profit or loss will the company recognize in the first and second year if it recognizes revenue upon contract completion?
A construction company entered into a fixed-price contract to build an office building for $44 million. Construction costs incurred during the first year were $14 million and estimated costs to complete at the end of the year were $21 million. The building was completed during the second year. Construction costs incurred during the second year were $22 million. How much revenue and gross profit or loss will the company recognize in the first and second year if it recognizes revenue upon contract completion?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A construction company entered into a fixed-price contract to build an office building for $44
million. Construction costs incurred during the first year were $14 million and estimated costs to
complete at the end of the year were $21 million. The building was completed during the second
year. Construction costs incurred during the second year were $22 million.
How much revenue and gross profit or loss will the company recognize in the first and second year
if it recognizes revenue upon contract completion?
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