January 2, 2019, TI enters into a contract with Drewry Corp. to build a new piece of equipment. The contract price is $3 million, and construction is expected to take 18 months. Drewry is billed and pays $1,500,000 of the contract price on January 2, 2019, and will pay the balance at completion.
TI estimates that the cost of construction will be $2.2 million.
Drewry includes two performance bonuses in the contact:
The bonuses are payable when a U.S. patent is approved and when international distribution is approved.
On the date the contract is signed, IT estimates that there is an 80% chance it will receive U.S. patent protection by March 15, 2020, but only a 30% chance that the equipment will be approved for international distribution.
TI received a U.S. patent on the equipment design on November 15, 2019, and immediately billed Drewry and received its bonus payment. On December 31, 2019, TI has incurred $1,760,000 of contract costs and is 80% complete. TI won approval for international distribution on January 15, 2020, and completed the equipment project on April 15, 2020, at a cost of $2,200,000.
Required:
College Accounting, Chapters 1-27
Managerial Accounting: The Cornerstone of Business Decision-Making
Accounting Information Systems
Corporate Financial Accounting
Financial & Managerial Accounting
Financial Accounting
Financial And Managerial Accounting
Foundations of Business (MindTap Course List)
Essentials of Business Communication (MindTap Course List)
Fundamentals of Financial Management (MindTap Course List)
Contemporary Marketing
Brief Principles of Macroeconomics (MindTap Course List)
Essentials of Economics (MindTap Course List)
Economics:
Principles of Economics (MindTap Course List)
ECON MICRO
Accounting Information Systems
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
MKTG 12:STUDENT ED.-TEXT
Management, Loose-Leaf Version
Principles of Macroeconomics (MindTap Course List)
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
STATISTICS F/BUSINESS+ECONOMICS-TEXT
Financial Accounting
Financial & Managerial Accounting
College Accounting (Book Only): A Career Approach
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
College Accounting (Book Only): A Career Approach
Accounting (Text Only)
Exploring Economics
Pkg Acc Infor Systems MS VISIO CD
Principles of Macroeconomics (MindTap Course List)
Statistics for Business & Economics, Revised (MindTap Course List)
Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
Fundamentals of Financial Management (MindTap Course List)
Corporate Financial Accounting
Survey of Accounting (Accounting I)
PAYROLL ACCT.,2019 ED.(LL)-TEXT
Macroeconomics
Purchasing and Supply Chain Management
Economics For Today
Microeconomics
Economics (MindTap Course List)
Practical Management Science
Cornerstones of Cost Management (Cornerstones Series)
Managerial Accounting
Cornerstones of Financial Accounting
Economics: Private and Public Choice (MindTap Course List)
Macroeconomics: Private and Public Choice (MindTap Course List)
MACROECONOMICS FOR TODAY
Understanding Management (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)