Answer:
Total amount of Revenue, 2021 = $5499000
Balance in the Accounts Receivable account = $5250000
Explanation:
Given
Progress billings and payments = $1300000
Total contract price = $18330000
Estimated total costs = $17500000.
Time = 3 years
Estimated Completion = 30%
Calculating the total amount of Revenue from Long-Term Contracts recognized for 2021
Total amount of Revenue, 2021 = Total contract revenue * % Completed during the year
Total = $18330000 * 30%
Total = $5499000
Calculating the balance in the Accounts Receivable account
Balance = New Estimate of Costs expected * % Completed during the year
Balance = $17500000 * 30%
Balance = $5250000
Answer:
$5,499,000
$1,300,000
Explanation:
Carla Vista Construction uses the percentage-of-completion method.
The contract calls for progress billings and payments of $1,300,000 each quarter.
The total contract price is $18,330,000
At December 31, 2021, Carla Vista estimates that it is 30% complete with the construction, based on costs incurred.
Using Percentage completion method implies that we account for revenue based on applying the percentage completed on the Total contract value: 30% x $18,330,000 = $5,499,000
Therefore the total amount of Revenue from Long-Term Contracts to be recognized for 2021 is $5,499,000
Accounts Receivable balance will be its last quarterly payment of $1,300,000
