In 2021, Montana Corp. entered into a contract to begin work on a two-year project. Montana recognizes revenue over time according to percentage of completion for this contract, and provides the following information (dollars in millions): Accounts receivable, 12/31/2021 (from construction progress billings) $37.5 $140 Actual construction costs incurred in 2021 Cash collected on project during 2021 $105 Construction in progress, 12/31/2021 Estimated percentage of completion during 2021 Selected Amounts O $70,000,000 O $60,000,000 $35,000,000 O $105,000,000 $210 What is the amount of gross profit on the project recognized by Montana during 2021? 50 %
In 2021, Montana Corp. entered into a contract to begin work on a two-year project. Montana recognizes revenue over time according to percentage of completion for this contract, and provides the following information (dollars in millions): Accounts receivable, 12/31/2021 (from construction progress billings) $37.5 $140 Actual construction costs incurred in 2021 Cash collected on project during 2021 $105 Construction in progress, 12/31/2021 Estimated percentage of completion during 2021 Selected Amounts O $70,000,000 O $60,000,000 $35,000,000 O $105,000,000 $210 What is the amount of gross profit on the project recognized by Montana during 2021? 50 %
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 6P
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Transcribed Image Text:In 2021, Montana Corp. entered into a contract to begin work on a two-year project. Montana recognizes revenue over time
according to percentage of completion for this contract, and provides the following information (dollars in millions):
Accounts receivable, 12/31/2021 (from construction progress billings) $37.5
$140
Actual construction costs incurred in 2021
Cash collected on project during 2021
$105
Construction in progress, 12/31/2021
$210
Estimated percentage of completion during 2021
Selected Amounts
O $70,000,000
What is the amount of gross profit on the project recognized by Montana during 2021?
O $60,000,000
$35,000,000
O $105,000,000
50 %
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