Supplier Corp. enters into a govemment contract in 2020 to provide computer equipment for $2 million. The contract consists of a single performance obligation to provide specified equipment in three years. Total costs estimated by Supplier Corp. for the contract are $1.4 million. The equipment is highly specialized and has no alternative uses. As negotiated in the contract, any costs incurred by Supplier Corp. plus a specified profit margin will be paid to Supplier Corp. in the event of a contract cancellation. Actual costs incured in 2020 were $650,000 including unexpected cost overruns of $80,000 due to labor inefficiencies. Required Would revenue be recognized over time or at a point in time for this contract? b. Calculate (1) recognized revenue, (2) the gross profit, and (3) adjusted contract margin to be recorded in 2020 a. Round answers to the nearest dollar. Refer to the information in Exercise 7-69. Assume that at the end of 2021, the estimate of total costs has increased to $1.50 million due to an increase in cost of materials. Actual costs incurred to date are $1,150,000, excluding year one inefficiencies. Round answers to the nearest dollar Required Calculate (1) recognized revenue, (2) the gross profit, and (3) adjusted contract margin to be recorded in 2021 b. Calculate (1) cumulative recognized revenue, (2) cumulative gross profit, and (3) cumulative adjusted con- tract margin at the end of 2021 a. Supplier Corp. enters into a govemment contract in 2020 to provide computer equipment for $2 million. The contract consists of a single performance obligation to provide specified equipment in three years. Total costs estimated by Supplier Corp. for the contract are $1.4 million. The equipment is highly specialized and has no alternative uses. As negotiated in the contract, any costs incurred by Supplier Corp. plus a specified profit margin will be paid to Supplier Corp. in the event of a contract cancellation. Actual costs incured in 2020 were $650,000 including unexpected cost overruns of $80,000 due to labor inefficiencies. Required Would revenue be recognized over time or at a point in time for this contract? b. Calculate (1) recognized revenue, (2) the gross profit, and (3) adjusted contract margin to be recorded in 2020 a. Round answers to the nearest dollar. Refer to the information in Exercise 7-69. Assume that at the end of 2021, the estimate of total costs has increased to $1.50 million due to an increase in cost of materials. Actual costs incurred to date are $1,150,000, excluding year one inefficiencies. Round answers to the nearest dollar Required Calculate (1) recognized revenue, (2) the gross profit, and (3) adjusted contract margin to be recorded in 2021 b. Calculate (1) cumulative recognized revenue, (2) cumulative gross profit, and (3) cumulative adjusted con- tract margin at the end of 2021 a
