E18-10 (Long-Term Contract Reporting) Derrick Adkins Construction Company began operations in 2007. Construction activity for the first year is shown below. All contracts are with different customers, and any work remaining at December 31, 2007, is expected to be completed in 2008.
Project Total Contract Price Billings through 12/31/07 Cash Collections through 12/31/07 Contract Costs Incurred through 12/31/07 Estimated Additional Costs to Complete
1 $ 560,000 $ 360,000 $340,000 $450,000 $140,000
2 670,000 220,000 210,000 126,000 504,000
3 500,000 500,000 440,000 330,000 –0–
$1,730,000 $1,080,000 $990,000 $906,000 $644,000
Derrick Adkins Construction Company uses the completed-contract method. Determine the amount of income or loss to be reported for each of the three projects in 2007.
Click here for the solution: Derrick Adkins Construction Company began operations in 2007
