Assume Avaya contracted to provide a customer with Internet infrastructure for $2,250,000. 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: 2024 2025 $ 320,000 $1,720,000 1,280,000 405,000 1,670,000 300,000 1,775,000 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 com 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. Complete this question by entering your answers in the tabs below.
Assume Avaya contracted to provide a customer with Internet infrastructure for $2,250,000. 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: 2024 2025 $ 320,000 $1,720,000 1,280,000 405,000 1,670,000 300,000 1,775,000 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 com 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. Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Exercise 6-19 (Algo) Long-term contract; revenue recognition over time and at a point in time [LO6-9]
Assume Avaya contracted to provide a customer with Internet infrastructure for $2,250,000. 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:
2024
2025
$ 320,000 $1,720,000
1,280,000
405,000
300,000
0
1,670,000
1,775,000
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 comple
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.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Required 4
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.
Note: Use percentages as calculated and rounded in the table below to arrive at your final answer. Loss amounts should be indicated with a minus
sign.
2024
2025
To date
Construction revenue
Construction expense
Gross profit (loss)
Percentages of completion
+
+
0
2024
Recognized in prior years
Recognized in 2024
$
0
$
0
$
0
2025
To date
Recognized in prior years
Recognized in 2025
0
Show less A](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F00e62c2d-8aaa-40ea-83b0-eb0019187de3%2Fac6398c6-4db5-41f0-ae87-8477583b32c2%2Fnqsd6nk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 6-19 (Algo) Long-term contract; revenue recognition over time and at a point in time [LO6-9]
Assume Avaya contracted to provide a customer with Internet infrastructure for $2,250,000. 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:
2024
2025
$ 320,000 $1,720,000
1,280,000
405,000
300,000
0
1,670,000
1,775,000
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 comple
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.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Required 4
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.
Note: Use percentages as calculated and rounded in the table below to arrive at your final answer. Loss amounts should be indicated with a minus
sign.
2024
2025
To date
Construction revenue
Construction expense
Gross profit (loss)
Percentages of completion
+
+
0
2024
Recognized in prior years
Recognized in 2024
$
0
$
0
$
0
2025
To date
Recognized in prior years
Recognized in 2025
0
Show less A
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