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Lorna Corp. recognizes revenue over time for long-term contracts. At the date the contract is signed, the contract price is $600,000 and the expected costs
Lorna Corp. recognizes revenue over time for long-term contracts. At the date the contract is signed, the contract price is $600,000 and the expected costs to complete the contract are $400,000. The following information is available:
| Year 1 | Year 2 | Year 3 |
---|---|---|---|
Costs incurred to date | $100,000 | $300,000 | $500,000 |
Estimated costs to complete | 300,000 | 200,000 | 0 |
Progress billings | 200,000 | 200,000 | 200,000 |
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