Contract terms Duration: 4/1 ~ 12/31 Contract amount: $624,000 with the owner $598,000 with the subcontractors including the suppliers
Contract terms Duration: 4/1 ~ 12/31 Contract amount: $624,000 with the owner $598,000 with the subcontractors including the suppliers
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter8: Revenue Recognition, Receivables, And Advances From Customers
Section: Chapter Questions
Problem 48P
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Question
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Company's total assets and liabilities by the end of April
- Total Assets (Cash only): $2,787,000
- Total Liabilities: $1,863,000
Construction project
- Contract terms
- Duration: 4/1 ~ 12/31
- Contract amount:
- $624,000 with the owner
- $598,000 with the subcontractors including the suppliers
- Terms of payment:
- Monthly payment
- The owner pays the contractor within a month after the contractor bills the owner.
- The owner holds 5% of each payment to the contractors for retention.
- The contractor pays the subcontractors within a month after the subcontractors bill the contractor.
- The contractor holds 5% of each payment to the subcontractors for retention.
Information related to revenues and expenses in the project
- 4/1 Project Start
- 4/26 The subcontractors billed $54,000 to the contractor.
- 4/30 The contractor billed $57,000 to the owner.
- 5/20 The owner paid 95% of the amount that the contractor billed in March to the contractor. 5% was held for retention.
- 5/20 The contractor paid 95% of the amount that the subcontractors billed in March to the subcontractors. 5% was held for retention.
- 5/26 The subcontractors billed $41,000 to the contractor.
- 5/31 The contractor billed $47,000 to the owner.
What is the amount of total assets on the balance sheet of May 31st?
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