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 $24 million. Construction costs incurred during the first year were $7 million, and estimated costs to complete at the end of the year were $13 million. The company recognizes revenue over time according to percentage of completion. During the first year the company billed its customer $7 million, of which $5 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 (i.e., $4 million should be entered as $4,000,000). Balance Sheet (Partial) Assets: Accounts receivable Costs plus profit in excess of billings
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 $24 million. Construction costs incurred during the first year were $7 million, and estimated costs to complete at the end of the year were $13 million. The company recognizes revenue over time according to percentage of completion. During the first year the company billed its customer $7 million, of which $5 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 (i.e., $4 million should be entered as $4,000,000). Balance Sheet (Partial) Assets: Accounts receivable Costs plus profit in excess of billings
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 $24 million. Construction costs incurred
during the first year were $7 million, and estimated costs to complete at the end of the year were $13 million. The company recognizes
revenue over time according to percentage of completion.
During the first year the company billed its customer $7 million, of which $5 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 (i.e., $4 million should be entered as $4,000,000).
Balance Sheet (Partial)
Assets:
Accounts receivable
Costs plus profit in excess of billings](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F76f13ed3-dc04-4cda-b28f-faa8c575f923%2F6f028677-d378-4fe2-a501-a08361ad3a0e%2F1dklbgu_processed.jpeg&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 $24 million. Construction costs incurred
during the first year were $7 million, and estimated costs to complete at the end of the year were $13 million. The company recognizes
revenue over time according to percentage of completion.
During the first year the company billed its customer $7 million, of which $5 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 (i.e., $4 million should be entered as $4,000,000).
Balance Sheet (Partial)
Assets:
Accounts receivable
Costs plus profit in excess of billings
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