Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. supplier corp. enters into a government contract d

Supplier Corp. enters into a government contract during the year to provide computer equipment for...

70.2K

Verified Solution

Question

Accounting

Supplier Corp. enters into a government contract during the year to provide computer equipment for $1,800,000. The contract consists of a single performance obligation to provide specified equipment in three years. Total costs estimated by Supplier Corp. for the contract are $1,260,000 . The equipment is highly specialized and has no alternative uses. As negotiated in the contract, any costs incurred by Supplier Corp. plus a specified profit margin will be paid to Supplier Corp. in the event of a contract cancellation. Actual costs incurred during the year were $576,000 including unexpected cost overruns of $72,000 due to labor inefficiencies. a. Would revenue be recognized over time or at a point in time for this contract? AnswerRecognize revenue over timeRecognize revenue at a point in time

b. Calculate (1) recognized revenue, (2) the gross profit, and (3) adjusted contract margin to be recorded during the year.

1. Recognized revenue

Answer
2. Gross profit

Answer
3. Adjusted contract margin

Answer

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students