Computing Income Statement Effect of Revenue Recognition on Long-Term Construction Contract On January 1, BuilderOne Inc. enters into a contract with a customer to redesign and update an office building for a price of $\$ 2,400,000 $. The construction is estimated to take three years at a total estimated cost of $\$ 2,000,000 $. Costs incurred during the year total $\$ 400,000 $. Determine the revenue and expense amounts to be recognized in the income statement during the year assuming that the company appropriately recognizes revenue at a point in time.

Computing Income Statement Effect of Revenue Recognition on Long-Term Construction Contract On January 1, BuilderOne Inc. enters into a contract with a customer to redesign and update an office building for a price of $\$ 2,400,000 $. The construction is estimated to take three years at a total estimated cost of $\$ 2,000,000 $. Costs incurred during the year total $\$ 400,000 $. Determine the revenue and expense amounts to be recognized in the income statement during the year assuming that the company appropriately recognizes revenue at a point in time.

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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