Question - Use following to answer questions
Seasons Construction is constructing an office building under contract for Cannon Company. The contract calls for progress billings and payments of $930,000 each quarter. The total contract price is $11,160,000 and Seasons estimates total costs of $10,650,000. Seasons estimates that the building will take 3 years to complete, and commences construction on January 2, 2012.
1. At December 31, 2012, Seasons Construction estimates that it is 75% complete with building; however, the estimate of total costs to be incurred has risen to $10,800,000 due to unanticipated price increases. What is the total amount of Construction Expense that Seasons will recognize for the year ended December 31, 2013?
2. At December 31, 2012, Seasons Construction estimates that it is 75% complete with building; however, the estimate of total costs to be incurred has risen to $10,800,000 due to unanticipated price increases. What is reported in the balance sheet at December 31, 2013 for Seasons as the difference between the Construction in Process and the Billings on Construction in Process accounts, AND IS IT A DEBIT OR A CREDIT?
3. SEASONS CONSTRUCTION COMPLETE THE REMAINING 25% of the building construction on December 31, 2014, as scheduled. At that time the total costs of construction are $11,250,000. What is the total amount of revenue from long-term contracts and Construction Expenses that Seasons will recognize for the year ended December 31, 2014?