Question

In 2014, Steinrotter Construction Corp. began construction work under a 3-year contract. The contract price was $1,800,000. Steinrotter uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2014, are shown below.Balance Sheet Accounts receivable $32,400 Construction in process 117,000 Less: Billings 110,700 Costs and recognized profit in excess of billings 6,300 Income Statement Income (before tax) on the contract recognized in 2014 $35,100 How much cash was collected in 2014 on this contract?

Answer 1

Answer:

$78,300

Explanation:

The computation of the cash collected is shown below:

Cash collection = Billings cost - account receivable

= $110,700 - $32,400

= $78,300

Since we have to compute the cash collected so we deduct the account receivable from the billings so that the accurate amount could arrive

Therefore, all the other information which is mentioned is not relevant. Hence, ignored it