Question
Williams Construction is constructing an office building under contract for Harley Company and uses the percentage-of-completion method. The contract calls for progress billings and payments
Williams Construction is constructing an office building under contract for Harley Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1,550,000 each quarter. The total contract price is $18,600,000 and Williams estimates total costs of $17,750,000. Williams estimates that the building will take 3 years to complete, and commences construction on January 2, 2021.
At December 31, 2021, Williams estimates that it is 30% complete with the construction, based on costs incurred. What is the total amount of Revenue from Long-Term Contracts recognized for 2021 and what is the balance in the Accounts Receivable account assuming Harley Company has not yet made its last quarterly payment?
| Revenue = $5,325,000 Accounts Receivable = $6,200,000 | ||
| Revenue = $5,580,000 Accounts Receivable = $1,550,000
| ||
| Revenue = $5,325,000 Accounts Receivable = $1,550,000
| ||
| Revenue = $6,200,000 Accounts Receivable = $6,200,000
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Accounting
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
3rd edition
9780077506902, 78025540, 77506901, 978-0078025549
