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E18-16B (Recognition of Revenue on Long-Term Contract and Entries)Young Tree Construction Company uses the percentage-of-completion method of accounting. In 2014, Young Tree began work under a contract with a contract price of $1,500,000. Other details fo

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E18-16B (Recognition of Revenue on Long-Term Contract and Entries)Young Tree Construction Company uses the percentage-of-completion method of accounting. In 2014, Young Tree began work under a contract with a contract price of $1,500,000. Other details follow;2014 2015;Costs incurred during the year $980,000 $1,375,000;Estimated costs to complete, as of December 31 420,000 ?0?;Billings to date 800,000 1,500,000;Collections to date 250,000 1,500,000;Instructions;(a) What portion of the total contract price would be recognized as revenue in 2014? In 2015?;(b) Assuming the same facts as those above except that Young Tree uses the completed-contract method of accounting, what portion of the total contract price would be recognized as revenue in 2015?

 

Paper#75356 | Written in 18-Jul-2015

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