Question
Rustic Construction Company uses the percentage of completion method of recognizing revenue on construction contracts. It uses full accrual accounting and prepares monthly financial statements.
Rustic Construction Company uses the percentage of completion method of recognizing revenue on construction contracts. It uses full accrual accounting and prepares monthly financial statements. Rustic's records showed the following data relating to the construction of an office building:
Total contract awarded $95,000 Total estimated costs on the project $95,000 - $18,000 Payments from the buyer on April 25th = 30% of contract Payments from the buyer on June 17th = 30% of contract Payments from the buyer on July 30th = 40% of contract Costs incurred on the project and billed for the month of April = 40% of total Costs incurred on the project and billed for the month of May = 30% of total Costs incurred on the project and billed for the month of June = 30% of total Project was completed at the end of month 3.
Required 1: Assuming no other transaction happened, what is the balance of Accounts Receivables at April 30th? $
Required 2: Assuming no other transaction happened, what is the balance of Accounts Receivables on May 30th? $
Required 3: Assuming no other transaction happened, what is the balance of Accounts Receivables on June 30th? $Rustic Construction Company uses the percentage of completion method of recognizing revenue on construction contracts. It uses full accrual accounting and prepares monthly financial statements. Rustic's records showed the following data relating to the construction of an office building:
Total contract awarded $95,000 Total estimated costs on the project $95,000 - $18,000 Payments from the buyer on April 25th = 30% of contract Payments from the buyer on June 17th = 30% of contract Payments from the buyer on July 30th = 40% of contract Costs incurred on the project and billed for the month of April = 40% of total Costs incurred on the project and billed for the month of May = 30% of total Costs incurred on the project and billed for the month of June = 30% of total Project was completed at the end of month 3.
Required 1: Assuming no other transaction happened, what is the balance of Accounts Receivables at April 30th? $
Required 2: Assuming no other transaction happened, what is the balance of Accounts Receivables on May 30th? $
Required 3: Assuming no other transaction happened, what is the balance of Accounts Receivables on June 30th? $
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Principles Of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter
13th Edition
9780132738729, 136119468, 132738724, 978-0136119463
