Problem
Rustic Construction Company uses the percentage of completion method of recognizing revenue on construction contracts. It uses full accrual accounting and prepares monthly financial statements. Rustic's records showed the following data relating to the construction of an office building:
Total contract awarded $99,400
Total estimated costs on the project $99,400 - $18,000
Payments from the buyer on April 25th = 30% of contract
Payments from the buyer on June 17th = 30% of contract
Payments from the buyer on July 30th = 40% of contract
Costs incurred on the project and billed for the month of April = 40% of total
Costs incurred on the project and billed for the month of May = 30% of total
Costs incurred on the project and billed for the month of June = 30% of total
Project was completed at the end of month 3.
1. Assuming no other transaction happened, what is the balance of Accounts Receivables at April 30th?
2. Assuming no other transaction happened, what is the balance of Accounts Receivables on May 30th?
3. Assuming no other transaction happened, what is the balance of Accounts Receivables on June 30th?