Captain Construction Company is engaged in a road construction contract to build a highway over a three-year period. Captain will receive $22,000,000 for building five miles of highway Captain estimates that it will incur $20,000,000 of costs before the contract is completed. As of the end of the first year Captain incurred $5,000,000 of costs allocated to the contract
Read the requirements.
Requirement a. How much income from the contract must Captain report during the first year? (Do not round interim calculations. Only round the amount you input in the cell to the nearest dollar Enter a loss with a minus sign or parentheses.) Year 1 Revenue Costs Income (loss)
Requirement b. Assume Captain incurs an additional $8,000,000 of costs during the second year How much income is reported during that year? (Do not round interim calculations Only round the amount you input in the cell to the nearest dollar. Enter a loss with a minus sign or parentheses.) Year 2 Revenue Costs
Requirement C. Assume that Captain incurs an additonal $7400000 of costs in the third and final year of the contract. How much does Captain report during the third year?
Requirement D. Will Captain recieve or pay look-back jnterest? Explain
contract a. How much income from the contract must Captain report during the first year? b. Assume Captain incurs an additional $8,000,000 of costs during the second year. How much income is reported during that year? c. Assume that Captain incurs an additional $7,400,000 of costs in the third and final year of the contract. How much does Captain report during the third year? d. Will Captain receive or pay look-back interest? Explain
