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What is the total amount of revenue from long-term contracts

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Question - Ivanhoe Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1050000 each quarter. The total contract price is $12600000 and Ivanhoe estimates total costs of $17250000. Ivanhoe estimates that the building will take 3 years to complete, and commences construction on January 2, 2018.

At December 31, 2019, Ivanhoe Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $17500000 due to unanticipated price increases. Ivanhoe Construction completes the remaining 25% of the building construction on December 31, 2020, as scheduled. At that time the total costs of construction are $18250000. What is the total amount of Revenue from Long-Term Contracts and Construction Expenses that Ivanhoe will recognize for the year ended December 31, 2020?

Reference no: EM132486927

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