In 2014,Amsterdam Builders began construction work under a three-year contract at a price of $7,525,000.The firm uses the percentage-of-completion method for financial accounting purposes.The income to be recognized each year is based on the proportion of cost incurred to the total estimated costs for completing the contract.The financial statement presentations relating to this contract on December 31,2014,are:
Determine the
(1)cash collected in 2014.
(2)estimated income on the construction contract.
Definitions:
Total Assets
The sum of all resources owned by a company, valued at cost, which are expected to provide future economic benefits.
Bank
A financial institution licensed to receive deposits, offer loans, and provide other financial services.
Accounts Payable
Short-term liabilities of a company, representing amounts owed to suppliers or creditors for goods and services received but not yet paid for.
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