Reference no: EM132525743

Question - Rice Contractors began a contract to build a new student union on the Southern State University campus during Year 1 for $910,000. Information concerning the project follows:

Year 1

% work completed: 25%

Cost Incurred: 172,000

Progress Billings: 160,000

Cash Collected: 130,000

Year 2

% work completed: 35%

Cost Incurred: 248,000

Progress Billings: 360,000

Cash Collected: 340,000

Year 3

% work completed: 40%

Cost Incurred: 180,000

Progress Billings: 380,000

Cash Collected: 430,000

Required -

1) At the end of Year 1, how much is the balance of the asset account Production-in-Progress if Rice Contactors uses the completed contract method?

2) How much revenue should Rice recognize during Year 1 if Rice uses the completed contract method?