Reference no: EM13765320

(Long-Term Contract Reporting)

Bearing Construction Company began operations in 2014. Construction activity for the first year is shown below. All contracts are with different customers, and any work remaining at December 31, 2014, is expected to be completed by the end of 2015.

                                                                 Cash             Contract                  Estimated

                   Total           Billings           Collections           Costs                IncurredAdditional

                  Contract        through          through             through                      Costs to

Project        Price          12/31/14          12/31/14           12/31/14                  Complete

X              $ 450,000     $ 80,000          $ 70,000         $115,000                      $276,500

Y                 200,000      200,000           180,000            191,000                          -0-

Z                  360,000      210,000          210,000              79,000                       310,000

$               1,010,000    $490,000         $460,000          $385,000                    $586,500

Instructions

Prepare a partial income statement and balance sheet to indicate how the above information would be reported for financial statement purposes. Bearing Construction Company uses the completed-contract method.