Stelle Technology has a contract to build a network for a customer for a total sales price of €10 million. Th e network will take an estimated three years to build, and total building costs are estimated to be €6 million. Stelle recognizes long-term contract revenue using the percentage-of-completion method and estimates percentage complete based on expenditure incurred as a percentage of total estimated expenditures. 1 . At the end of Year 1, the company had spent €3 million. Total costs to complete are estimated to be another €3 million. How much revenue will Stelle recognize in Year 1? 2 . At the end of Year 2, the company had spent an additional €2.4 million for an accumulated total of €5.4 million. Total costs to complete are estimated to be another €0.6 million. How much revenue will Stelle recognize in Year 2? 3 . At the end of Year 3, the contract is complete. Th e company spent an accumulated total of €6 million. How much revenue will Stelle recognize in Year 3?

Lockheed Martin has secured a satellite launch contract from a European communications company that will pay them € 3.9M per year for the next 8 years . To land that contract , they invested € 13M in a satellite tracking system . Of that amount , €8M was paid up front and the remaining €5M was spent during the first year of operation . The annual operating costs for the satellite tracking system are estimated at € 0.9M per year ( which includes the cost of personnel , electricity , maintenance , etc. ) . At the end of the contract , it is estimated that the equipment will have a salvage value of € 0.5M . What is Lockheed Martin's internal rate of return ( IRR ) on this project ?

A construction company entered into a fixed-price contract to build an office building for $42 million. Construction costs incurred during the first year were $12 million, and estimated costs to complete at the end of the year were $28 million. The company recognizes revenue over time according to percentage of completion. How much revenue and gross profit or loss will appear in the company's income statement in the first year of the contract? Note: Enter your answers in whole dollars and not in millions (i.e., $4 million should be entered as $4,000,000). Revenue

Xtra Mechanical, Inc. is a manufacturer of machine parts with locations in the United States. It is considering entering into an eight year supply agreement with a customer where it will supply certain parts to the customer for their products. The project will require Xtra to purchase a new machine at the begining of the project and the cost of the machine is $8,500,000. At the end of the project, the machine is expected to be sold in the used market for 20% of the original cost before paying taver. The five year MACRS depreciation will be used for tax purposes. The depreciate rates are shown below. There is an initial networking capital investment of $15,000 and no further investment in not working capital is required. We assume that all the money tied up in the networking capital account will be recovered by the end of the project Revenues from the contract per year are shown below. Cost of goods sold is expected to be 50% of revenues. In addition to cost of goods seld, the project…

Caramel Spa Company sells prefabricated pools that cost $80,000 to customers for $144,000. The sales price includes an installation fee, which is valued at $20,000. The fair value of the pool is $128,000. The installation is considered a seperate performance obligation and is expected to take 3 months to complete. The transaction price allocated to the pool and the installation is

Shumpert, Inc. entered into a contract that was to take two years to complete, with an estimated cost of $2,257,600. The contract price was $3,160,640. Costs of the contract for 2014, the first year, totaled $1,693,200.   a. What was the gross profit reported by the percentage of completion method for 2014?