Computing Income Statement Effect of Revenue Recognition on Long-Term Construction Contract On January 1, 2020, 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 in 2020 total $400,000. Determine the revenue and expense amounts to be recognized in the income statement in 2020 assuming that the company appropriately recognizes revenue at a point in time. 480,000 * Total revenue recognized in 2020 $ Total expense recognized in 2020 $ 400,000 X
Computing Income Statement Effect of Revenue Recognition on Long-Term Construction Contract On January 1, 2020, 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 in 2020 total $400,000. Determine the revenue and expense amounts to be recognized in the income statement in 2020 assuming that the company appropriately recognizes revenue at a point in time. 480,000 * Total revenue recognized in 2020 $ Total expense recognized in 2020 $ 400,000 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Computing Income Statement Effect of Revenue Recognition on Long-Term
Construction Contract
On January 1, 2020, 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 in 2020 total $400,000. Determine the revenue and expense
amounts to be recognized
in the income statement in 2020 assuming that the company appropriately recognizes
revenue at a point in time.
Total revenue recognized in 2020 $
Total expense recognized in 2020 $
480,000 *
400,000 X
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