IFA27 – Percentage of Completion Method – Intermediate Accounting

Download the Workbook: http://www.tonybell.com Unlock 100+ Members Accounting Tutorials: https://www.youtube.com/channel/UCNFClg6mzfZ5ixpuH9c7f1A/join In This Video: We tackle Problem 6-12A, shifting our focus to recognizing revenue over time using the Percentage of Completion method. This comprehensive practice problem follows Tower Construction as they build a $12,000,000 bridge for the City of Kamloops. We will walk through the year-one journal entries to record costs incurred, billings sent, and cash collected. Then, we calculate the exact percentage of completion to determine the appropriate amount of Gross Profit to recognize in 2031. Finally, we analyze the year-end account balances for Accounts Receivable, Construction in Process, Billings on Construction, and determine the Net Contract Position. Module Overview (IFA20–IFA28): This module explores Revenue Recognition in depth. We will thoroughly examine the 5-step revenue recognition model and apply it to a variety of complex business scenarios. You will learn how to handle multiple performance obligations, variable consideration, discounts, and long-term contracts to ensure revenue is recognized at the proper time and in the correct amount.