A customer hired a contractor to construct a storage facility next to the customers home. The contract includes promises to provide the materials for the facility, to lay the foundation, construct the facility, and install fixtures within the facility. The contractor is able to identify the standalone prices for each of these aspects of the job based upon other contracts for these individual services. How many performance obligations are in the 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 over time using the cost-to-cost method.

Assume the same facts except that the company appropriately recognizes revenue at a point in time. Determine the revenue and expense amounts to be recognized in the in-come statement in 2020.