On 1/1/2021, the Laith Construction Company signed a contract with Khaled to build a property for 4 million, and that the property would be delivered no later than two years. with a performance bonus of JD 50,000 that will be paid based on the timing of completion. The amount of the performance bonus decreases by 5% per month for every month beyond the agreed-upon completion date. Management estimates that there is a 60% probability that the contract will be completed by the agreed-upon completion date, a 25% probability that it will be completed 1 month late, and only a 15% probability that it will be completed 2 months late. The completion rate on 31/12/2021 in the bid was 40%. Instruction: Answer the following questions 1. Expected total contract revenue is.... 2. The revenue to be recognized from the Construction in the income statement for the year 2021 is.

On 1/1/2021, the Laith Construction Company signed a contract with Khaled to build a property for 4 million, and that the property would be delivered no later than two years. with a performance bonus of JD 50,000 that will be paid based on the timing of completion. The amount of the performance bonus decreases by 5% per month for every month beyond the agreed-upon completion date. Management estimates that there is a 60% probability that the contract will be completed by the agreed-upon completion date, a 25% probability that it will be completed 1 month late, and only a 15% probability that it will be completed 2 months late. The completion rate on 31/12/2021 in the bid was 40%. Instruction: Answer the following questions 1. Expected total contract revenue is.... 2. The revenue to be recognized from the Construction in the income statement for the year 2021 is.

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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