I\'m working on my assigment Intermediate accounting 1 for Assume norte networks

Question

I'm working on my assigment Intermediate accounting 1 for Assume norte networks contracted to provide a customer with internet infrasture having a hard time try to calculate 216 & 2017conduction revenue to date and recognized contruction expenses and gross profit ( loss)

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,000,000. The project began in 2016 and was completed in 2017. Data relating to the contract are summarized below:

  

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,000,000. The project began in 2016 and was completed in 2017. Data relating to the contract are summarized below:

Explanation / Answer

Revnue recognition via Percentage of completion method

% complete in 2016 = cost incurred / total estimated cost

= 300000 / (300000 + 1200000 ) = 20%

Revnue based on billing

Particulars Total 2016 (20%) 2017 Revnue 2000000 400000 1600000 Less: Cost 1875000 300000 1575000 Gross Profit 125000 100000 25000

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