Question
Constructing and Assessing Income Statements Using Cost-to-Cost Method Assume General Electric Company agreed in May 2016 to construct a nuclear generator for NSTAR, a utility
Constructing and Assessing Income Statements Using Cost-to-Cost Method Assume General Electric Company agreed in May 2016 to construct a nuclear generator for NSTAR, a utility company serving the Boston area. General Electric Company estimated that its construction costs would be $360 million. The contract price of $450 million is to be paid as follows: $150 million at the time of signing; $150 million on December 31, 2016; and $150 million at completion in May 2017. General Electric incurred the following costs in constructing the generator: $144 million in 2016 and $216 million in 2017.
a. Compute the amount of General Electric's revenue, expense, and income for both 2016 and 2017, and for both years combined, under the cost-to-cost revenue recognition method. Enter dollar amounts in millions.
Cost-to-Cost Method | ||||
---|---|---|---|---|
Year |
Costs incurred | % of total excepted costs |
Revenue recognized |
Income |
2016 | Answer | Answer | Answer | Answer |
2017 | Answer | Answer | Answer | Answer |
Total | Answer | Answer | Answer |
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