Assume Avaya contracted to provide a customer with Internet infrastructure for $2,200,000. The project began in 2024 and was completed in 2025. Data relating to the contract are summarized below: 2024 2025 Costs incurred during the year $ 316,000 $ 1,700,000 Estimated costs to complete as of 12/31 1,264,000 0 Billings during the year 400,000 1,660,000 Cash collections during the year 290,000 1,770,000 Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming Avaya recognizes revenue over time according to percentage of completion. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming this project does not qualify for revenue recognition over time.
Assume Avaya contracted to provide a customer with Internet infrastructure for $2,200,000. The project began in 2024 and was completed in 2025. Data relating to the contract are summarized below: 2024 2025 Costs incurred during the year $ 316,000 $ 1,700,000 Estimated costs to complete as of 12/31 1,264,000 0 Billings during the year 400,000 1,660,000 Cash collections during the year 290,000 1,770,000 Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming Avaya recognizes revenue over time according to percentage of completion. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming this project does not qualify for revenue recognition over time.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume Avaya contracted to provide a customer with Internet infrastructure for $2,200,000. The project began in 2024 and was completed in 2025. Data relating to the contract are summarized below:
| 2024 | 2025 | |
|---|---|---|
| Costs incurred during the year | $ 316,000 | $ 1,700,000 |
| Estimated costs to complete as of 12/31 | 1,264,000 | 0 |
| Billings during the year | 400,000 | 1,660,000 |
| Cash collections during the year | 290,000 | 1,770,000 |
- Prepare a partial
balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming Avaya recognizes revenue over time according to percentage of completion. - Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming this project does not qualify for revenue recognition over time.
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