Information on Red Hot Co.’s construction contracts with customers which commenced during 20x1 is shown below: Contract 1 Contract price 420,000; Costs incurred during the year 240,000; Estimated costs to complete 120,000; Progress billings 150,000 Collections 90,000 Contract 2: Contract price P300,000; Costs incurred during the year 280,000; Estimated costs to complete 40,000; Progress billings 270,000; Collections 250,000. At contract inception, Red Hot Co. assessed that its performance obligation in each of Contract 1 and Contract 2 is satisfied over time. Red Hot Co. uses the ‘cost-to-cost’ method in measuring its progress on the contract. How much total profit (loss) is recognized from the two contracts in 20x1?\\n*\\n4 points\\n40,000\\n20,000\\n(20,000)\\n0
Information on Red Hot Co.’s construction contracts with customers which commenced during 20x1 is shown below: Contract 1 Contract price 420,000; Costs incurred during the year 240,000; Estimated costs to complete 120,000; Progress billings 150,000 Collections 90,000 Contract 2: Contract price P300,000; Costs incurred during the year 280,000; Estimated costs to complete 40,000; Progress billings 270,000; Collections 250,000. At contract inception, Red Hot Co. assessed that its performance obligation in each of Contract 1 and Contract 2 is satisfied over time. Red Hot Co. uses the ‘cost-to-cost’ method in measuring its progress on the contract. How much total
Trending now
This is a popular solution!
Step by step
Solved in 1 steps
