Constructing and Assessing Income Statements Using Percentage of Completion Assume that General Electric...
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Constructing and Assessing Income Statements Using Percentage of Completion Assume that General Electric Company agreed in February Year 1 to construct an electricity generating facility for Eversource Energy, a utility serving the Boston area. The contract price of $800 million is to be paid as follows: $320 million at the time of signing; $160 million on December 31, Year 1; and \$320 million at completion in May Year 2. General Electric incurred the following costs in constructing the power plant: $160 million in Year 1, and $480 million in Year 2. The construction of the power generating facility is considered to be a single performance obligation. a. Compute the amount of General Electric's revenue, expense, and income for both Year 1 and Year 2 assuming that its performance obligation is fulfilled over time and that the costs it incurs are reflective of the value conveyed to Eversource. Enter answers in millions. Do not use negative signs with answers. b. Compute the amount of GE's revenue, expense, and income for both Year 1 and Year 2 assuming that its performance obligation to construct the facility is fulfilled at a point in time (at the completion of construction) Enter answers in millions. Do not use negative signs with answers
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Constructing and Assessing Income Statements Using Percentage of Completion Assume that General Electric Company agreed in February Year 1 to construct an electricity generating facility for Eversource Energy, a utility serving the Boston area. The contract price of $800 million is to be paid as follows: $320 million at the time of signing; $160 million on December 31, Year 1; and \$320 million at completion in May Year 2. General Electric incurred the following costs in constructing the power plant: $160 million in Year 1, and $480 million in Year 2. The construction of the power generating facility is considered to be a single performance obligation. a. Compute the amount of General Electric's revenue, expense, and income for both Year 1 and Year 2 assuming that its performance obligation is fulfilled over time and that the costs it incurs are reflective of the value conveyed to Eversource. Enter answers in millions. Do not use negative signs with answers. b. Compute the amount of GE's revenue, expense, and income for both Year 1 and Year 2 assuming that its performance obligation to construct the facility is fulfilled at a point in time (at the completion of construction) Enter answers in millions. Do not use negative signs with answers 