Assume Avaya contracted to provide a customer with Internet infrastructure for $2,200,000. The project began in 2024 and was completed in 2025. Data relating to the contract are summarized below: Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collections during the year Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming Avaya recognizes revenue over time according to percentage of completion. 2. Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming this project does no qualify for revenue recognition over time. 3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024 assuming Avaya recognizes revenue over time according to percentage of completion. 4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024 assuming this project does not qualify for revenue recognition over time. 2024 2025 $ 316,000 $1,700,000 1,264,000 Complete this question by entering your answers in the tabs below. Current assets: 400,000 1,660,000 290,000 1,770,000 Required 1 Required 2 Required 3 Required 4 Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming Avaya recognizes revenue over time according to percentage of completion. Current liabilities: Balance Sheet (Partial) At December 31, 2024
Assume Avaya contracted to provide a customer with Internet infrastructure for $2,200,000. The project began in 2024 and was completed in 2025. Data relating to the contract are summarized below: Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collections during the year Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming Avaya recognizes revenue over time according to percentage of completion. 2. Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming this project does no qualify for revenue recognition over time. 3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024 assuming Avaya recognizes revenue over time according to percentage of completion. 4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024 assuming this project does not qualify for revenue recognition over time. 2024 2025 $ 316,000 $1,700,000 1,264,000 Complete this question by entering your answers in the tabs below. Current assets: 400,000 1,660,000 290,000 1,770,000 Required 1 Required 2 Required 3 Required 4 Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming Avaya recognizes revenue over time according to percentage of completion. Current liabilities: Balance Sheet (Partial) At December 31, 2024
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 19RE
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Transcribed Image Text:Assume Avaya contracted to provide a customer with Internet infrastructure for $2,200,000. The project began in 2024 and was
completed in 2025. Data relating to the contract are summarized below:
Costs incurred during the year
Estimated costs to complete as of 12/31
Billings during the year
Cash collections during the year
Required:
1. Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming Avaya recognizes
revenue over time according to percentage of completion.
2. Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming this project does not
qualify for revenue recognition over time.
3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024,
assuming Avaya recognizes revenue over time according to percentage of completion.
4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024,
assuming this project does not qualify for revenue recognition over time.
2024
2025
$ 316,000 $1,700,000
1,264,000
Complete this question by entering your answers in the tabs below.
Current assets:
400,000 1,660,000
290,000 1,770,000
Required 1 Required 2 Required 3 Required 4
Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024,
assuming Avaya recognizes revenue over time according to percentage of completion.
Current liabilities:
Balance Sheet (Partial)
At December 31, 2024
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