Determine the percentage of completion

Assignment Help Finance Basics

Reference no: EM131814965

Question: XM, Ltd. was a small engineering firm that built high-tech robotic devices for electronics manufacturers. One very complex device was partially completed at the end of 2016. Barb McLauren, head engineer, knew the experimental technology was a failure and XM would not be able to complete the $20,000,000 contract next year. However, the corporation was getting ready to be sold in January. She told the controller that the device was 80% complete at year-end and on track for successful completion the following spring; the controller accrued 80% of the contract revenue at December 31, 2016. McLauren sold the company in January 2017 and retired. By mid-year, it became apparent that XM would not be able to complete the project successfully and the new owner would never recoup his investment.

Requirements: 1. For complex, high-tech contracts, how does a company determine the percentage of completion and the amount of revenue to accrue?

2. What action do you think was taken by XM in 2017 with regard to the revenue that had been accrued the previous year?

Reference no: EM131814965

Questions Cloud

Difference between underemployment and marginal attachment : What is the difference between underemployment and marginal attachment to the labour market?

What are some choices our government face : What are some choices our government face when it has limited tax revenues to fund the unlimited wants of its citizens.

Briefly describe the reimbursement methodologies : Select a payment system, discuss your selected payment system, and identify its role related to billing and reimbursement.

What effect would forgoing consumption today : Can someone help me understand to what effect would forgoing consumption today in order to invest for tomorrow have on future production possibilities?

Determine the percentage of completion : For complex, high-tech contracts, how does a company determine the percentage of completion and the amount of revenue to accrue?

Create a chart of accounts for a small business : Create a chart of accounts for a small business. Analyze and describe how you would change it to facilitate efficiency

Calculate the frictional unemployment : At the same? time, every month during the? year, 38 different people become? unemployed, and 38 other different people who were unemployed find jobs.

Pot minus the consulting costs : They expect to repeat this process every quarter for the foreseeable future. Can they agree to ban the consultants?

Amusement park in the middle of the dallas-fort : The Six Flags Over Texas amusement park in the middle of the Dallas-Fort Worth Metroplex has a tie-in marketing campaign with Coca-Cola during the summer

User Account

All Pages