Computing Income Statement Effect of Revenue Recognition on Long-Term Construction Contract On January 1, BuilderOne Inc. enters into a contract with a customer to redesign and update an office building for a price of $\$ 2,400,000 $. The construction is estimated to take three years at a total estimated cost of $\$ 2,000,000 $. Costs incurred during the year total $\$ 400,000 $. Determine the revenue and expense amounts to be recognized in the income statement during the year assuming that the company appropriately recognizes revenue at a point in time.

Computing Income Statement Effect of Revenue Recognition on Long-Term Construction Contract On January 1, BuilderOne Inc. enters into a contract with a customer to redesign and update an office building for a price of $\$ 2,400,000 $. The construction is estimated to take three years at a total estimated cost of $\$ 2,000,000 $. Costs incurred during the year total $\$ 400,000 $. Determine the revenue and expense amounts to be recognized in the income statement during the year assuming that the company appropriately recognizes revenue at a point in time.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter8: Revenue Recognition, Receivables, And Advances From Customers

Section: Chapter Questions

Problem 34E

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