Assume Avaya contracted to provide a customer with Internet infrastructure for $2,910,000. The project began in 2024 and was completed in 2025. Data relating to the contract are summarized below: 20242025Costs incurred during the year$ 376,000$ 2,265,000Estimated costs to complete as of 12/311,504,0000Billings during the year535,0001,810,000Cash collections during the year500,0001,845,000 Question: 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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Answered: Assume Avaya contracted to provide a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

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 $2,910,000. 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	$ 376,000	$ 2,265,000
Estimated costs to complete as of 12/31	1,504,000	0
Billings during the year	535,000	1,810,000
Cash collections during the year	500,000	1,845,000

Question: 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.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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