Question
On February 1, 2016, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,375,000. During 2016, costs
On February 1, 2016, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,375,000. During 2016, costs of $2,150,000 were incurred, with estimated costs of $4,150,000 yet to be incurred. Billings of $2,680,000 were sent and cash collected was $2,400,000. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In 2017, costs incurred were $2,680,000 with remaining costs estimated to be $3,825,000. 2017 billings were $2,930,000, and $2,625,000 cash was collected. The project was completed in 2018 after additional costs of $3,950,000 were incurred. The companys fiscal year-end is December 31. This project does not qualify for revenue recognition over time.
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