WCM Builders enters into a contract to build a shopping mall in 2019 for $6,000,000. Completion of the mall is expected to take 27 months and cost WCM $3,600,000. Upon signing the contract, WCM receives $600,000. During 2020, WCM incurs costs of $1,200,000 and receives a $1,000,000 progress payment. WCM’s forewoman estimates that the job is 50% complete at the end of 2020. How much income must WCM recognize in 2020 from the work done on the mall?

WCM Builders enters into a contract to build a shopping mall in 2019 for $6,000,000. Completion of the mall is expected to take 27 months and cost WCM $3,600,000. Upon signing the contract, WCM receives $600,000. During 2020, WCM incurs costs of $1,200,000 and receives a $1,000,000 progress payment. WCM’s forewoman estimates that the job is 50% complete at the end of 2020. How much income must WCM recognize in 2020 from the work done on the mall?

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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