Completed-contract method of accounting

Reference no: EM13760331

(Recognition of Revenue on Long-Term Contract and Entries) Hamilton Construction Company uses the percentage-of-completion method of accounting. In 2012, Hamilton began work under contract #E2-D2, which provided for a contract price of $2,200,000. Other details follow:

	2012	2013
Costs incurred during the year	$640,000	$1,425,000
Estimated costs to complete, as of December 31	960,000	-0-
Billings during the year	420,000	1,680,000
Collections during the year	350,000	1,500,000

Instructions

(a) What portion of the total contract price would be recognized as revenue in 2012? In 2013?

(b) Assuming the same facts as those above except that Hamilton uses the completed-contract method of accounting, what portion of the total contract price would be recognized as revenue in 2013?

Reference no: EM13760331

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