Ava Limited., which has a calendar year end, has entered into a non-cancellable fixed-price contract for $2.8 million beginning September 1, 2015, to build a road for a municipality. It has been estimated that the road construction will be complete by June 2017. The following data pertain to the construction period. 2015 2017 Costs to date. Estimated costs to complete $867,000 Cash collected to date 1,683,000 Progress billings to date (non-refundable) 921,000 767,000 2016 $1,804,800 $2,346,000 1,015,200 2,296,000 2,177,000 a) Calculate the amount of revenue to be recognized in 2015 and 2016. 0 2,800,000 2,800,000
Ava Limited., which has a calendar year end, has entered into a non-cancellable fixed-price contract for $2.8 million beginning September 1, 2015, to build a road for a municipality. It has been estimated that the road construction will be complete by June 2017. The following data pertain to the construction period. 2015 2017 Costs to date. Estimated costs to complete $867,000 Cash collected to date 1,683,000 Progress billings to date (non-refundable) 921,000 767,000 2016 $1,804,800 $2,346,000 1,015,200 2,296,000 2,177,000 a) Calculate the amount of revenue to be recognized in 2015 and 2016. 0 2,800,000 2,800,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Ava Limited., which has a calendar year end, has entered into a non-cancellable fixed-price contract for $2.8 million beginning September 1, 2015, to build a road for a municipality. It has been
estimated that the road construction will be complete by June 2017. The following data pertain to the construction period.
2017
Costs to date
Estimated costs to complete
2015
Cash collected to date
$867,000
1,683,000
Progress billings to date (non-refundable) 921,000
767,000
2016
$1,804,800 $2,346,000
1,015,200 0
2,296,000
2,177,000
a) Calculate the amount of revenue to be recognized in 2015 and 2016.
2,800,000
2,800,000
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