Introduction You are an experienced staff accountant working on the audit of RB Johnson Electric Company (the Company) as of and for the year ended December 31, 2022. All of the outstanding common stock of the Company is owned by Barry and Sam Johnson, who are brothers. The Company is engaged in commercial electrical construction on the East Coast of the United States. The Company was formed on January 1,1947 , and has been in continuous operation since that date. The Company employs approximately 100 people and has normal revenues between $25 and \$35 million. The Company's bonding needs and its line of credit agreement, with Truist, require the financial statements to be audited. The Company has a very good Chief Financial Officer, who was at one time a manager with your firm. Your firm has audited the financial statements for the last 10 years. Adam Silvia is the engagement partner and Joey Sykes is the engagement manager. Based on some staffing issues, you have effectively been assigned the role of engagement senior on this client and you are excited to be working with Joey and having a number of increased responsibilities. The audit has been completed and you and Joey are getting ready to transmit the completed file to Adam for his review. The Company uses the accrual method of accounting and recognizes revenue on the percentage completion method of accounting. The Company's recent adoption of ASC 606 did not materially impact the Company's revenue recognition. The Company's trial balance, as of and for the year ended December 31, 2022, follows. The Company recognizes revenue on the percentage completion method of accounting and in accordance with ASC 606. A summary of the Company's work-in-process detail, as of December 31,2022 , is as follows. In order to approximate percentage completion for the purpose of recognizing revenue, the Company computes the ratio of cost to date divided estimated total cost. In this problem, for illustrative purposes only, each contract is assumed to be 25% complete. The percent complete is then multiplied by the contract value to get the revenue earned. Revenue earned is then compared to what the Company has billed and recognized as revenue to determine whether the Company has a Contract Asset or a Contract Liability. A Contract Asset means the Company has earned more than they have billed, and a Contract Liability means the Company has billed more than they have earned. The recorded revenue is then adjusted to what has been earned by either a debit (decrease) to revenue or a credit (increase) to revenue