Southtel Is a Builder of Large Digital Networks Required:
Calculate the Amount of Revenue, Cost of Goods Sold

question 84

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:
$$\begin{array} { | l | l | l | l | } \hline & \text { Year 1 } & \text { Year 2 } & \text { Year 3 } \\\hline \text { Cumulative costs incurred } & 16,500 & 36,000 & 54,000 \\\hline \text { Additional costs to complete as estimated at } & & & \\\text { year end } & 49,500 & 12,000 & 0 \\\hline \text { Amounts invoiced to customer in the year } & 13,500 & 26,000 & 21,000 \\\hline \text { Cash collected in the year from the customer } & 10,500 & 25,000 & 12,500 \\\hline\end{array}$$ 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.
$$\begin{array} { | l | r | r | r | r | } \hline & \text { Year 1 } & \text { Year 2 } & \text { Year 3 } & \text { Total } \\\hline \text { Revenue } & & & & 48,000 \\\hline \text { Less: Cost of goods sold } & 16,500 & & & 54,000 \\\hline \text { Less: Expected loss (recovery) } & & ( 13,500 ) & & 0 \\\hline \text { Gross profit (loss) } & & & & ( 6,000 ) \\\hline\end{array}$$

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Definitions:

Positive Symptom

In the context of psychological disorders, referring to an excess or distortion of normal functions, such as hallucinations or delusions.

Schizophrenia

A psychiatric disorder marked by significant disturbances in thought, perception, emotions, and behavior, often manifesting as hallucinations, delusions, and disorganized speech.

Disorganized Speech

A symptom often associated with schizophrenia, marked by incoherent and nonsensical talk, making it hard for the individual to communicate effectively.

Negative Symptoms

In the context of psychiatric conditions, features such as apathy, lack of emotion, poor or nonexistent social functioning.