Question
IDC contracted with a homebuilder in December of last year to install carpet in 10 new homes being built. The contract price of $86,500 includes
IDC contracted with a homebuilder in December of last year to install carpet in 10 new homes being built. The contract price of $86,500 includes $52,600 for materials (carpet). The remaining $33,900 is for IDCs service of installing the carpet. The contract also stated that all money was to be paid up front. The homebuilder paid IDC in full on December 28 of last year. The contract required IDC to complete the work by January 31 of this year. Bryan purchased the necessary carpet on January 2 and began working on the first home January 4. He completed the last home on January 27 of this year. IDC entered into several other contracts this year and completed the work before year-end. The work cost $156,000 in materials. Bryan billed out $242,600 but only collected $220,000 by year-end. Of the $22,600 still owed to him, Bryan wrote off $3,650 he didnt expect to collect as a bad debt from a customer experiencing extreme financial difficulties. IDC entered into a three-year contract to clean the carpets of an office building. The contract specified that IDC would clean the carpets monthly from July 1 of this year through June 30 three years hence. IDC received payment in full of $9,108 ($253 a month for 36 months) on June 30 of this year. IDC sold 100 bottles of carpet stain remover this year for $5 per bottle (it collected $500). IDC sold 40 bottles on June 1 and 60 bottles on November 2. IDC had the following carpet-cleaning supplies on hand for this year and it uses the LIFO method of accounting for inventory under a perpetual inventory system:
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