S4_PLE_RevRec_LTContracts_Solution

S4_PLE_RevRec_LTContracts_Solution - ACCTG 620 | FALL 2011...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ACCTG 620 | Fall 2011 S4 PLE Page 1 ACCTG 620 | F ALL 2011 S4 PLE R EVENUE RECOGNITION FOR LONG - TERM CONTRACTS (S OLUTION ) Scenario: Otis Construction Company (OCC) has entered into a contract with total expected revenue of $10 million. OCC expects that total costs will be $8,750,000. Below are the costs, billings and cash collections for the three years of the contract. 2011 2012 2013 Total Costs this year $1,500,000 $6,000,000 $1,250,000 $ 8,750,000 Billings this year $1,200,000 $5,800,000 $3,000,000 $10,000,000 Cash collected this year $1,000,000 $4,500,000 $4,500,000 $10,000,000 Based on surveys of the stage of completion, it was determined the contract was 10% complete in 2011, 85% complete in 2012 and was 100% complete in 2013. OCC reports using US GAAP and IFRS and meets the criteria necessary to use the percentage-of completion method (revenue-cost approach). Required: Part 1: Complete the table below.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/04/2012 for the course ACCTG 620 taught by Professor Staff during the Spring '08 term at San Diego State.

Page1 / 3

S4_PLE_RevRec_LTContracts_Solution - ACCTG 620 | FALL 2011...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online