Southtel Is a Builder of Large Digital Networks

question 63

Essay

Southtel is a builder of large digital networks. In the midst of the high-tech euphoria, the company bid and won a $48,000,000 contract to build a network for the country of Elbonia. Details on the project over the last three years are as follows:
Required:
Calculate the amount of revenue, cost of goods sold (COGS), and gross profit (or loss)to be recognized in each of the three years. The company uses the percentage of completion method to account for long-term contracts. Record your answer in the following table.

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Definitions:

Excise Tax

A tax levied on specific goods, services, or transactions, often included in the price of items such as gasoline, alcohol, and tobacco.

SUVs

Short for Sport Utility Vehicles, these are large cars designed for both on-road and off-road driving, offering increased space and utility.

Government

The governing body of a nation, state, or community that is responsible for making and enforcing laws.

Administrative Costs

These are expenses associated with the day-to-day operations of a business or organization, including clerical, administrative, and managerial activities.