In 2025, Ivanhoe Construction Corp. began construction work under a 3-year contract. The contract price was $980,000. Ivanhoe uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2025, are shown below. Accounts receivable Construction in process Less: Billings Balance Sheet Costs and recognized profit in excess of billings $18,400 $62,500 58,600 3,900 Income Statement Income (before tax) on the contract recognized in 2025 $16,250 What was the initial estimated total income before tax on this contract? Income before tax on this contract $ A
In 2025, Ivanhoe Construction Corp. began construction work under a 3-year contract. The contract price was $980,000. Ivanhoe uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2025, are shown below. Accounts receivable Construction in process Less: Billings Balance Sheet Costs and recognized profit in excess of billings $18,400 $62,500 58,600 3,900 Income Statement Income (before tax) on the contract recognized in 2025 $16,250 What was the initial estimated total income before tax on this contract? Income before tax on this contract $ A
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 25E: Koolman Construction Company began work on a contract in 2019. The contract price is 3,000,000, and...
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