Explain contract using percentage-of-completion method

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Reference no: EM1394371

A construction company entered into a fixed-price contract to build an office building for $20 million. Construction costs incurred during the first year were $6 million and estimated costs to complete at the end of the year were $9 million. During the first year the company billed its customer $7 million, of which $5 million was collected before year-end.

What would appear in the year-end balance sheet related to this contract using Percentage-of-completion method?

Reference no: EM1394371

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