sierra logging company hired reid construction company to build a new bridge across 4374187

Sierra Logging Company hired Reid Construction Company to build a new bridge across the Brown Trout River. The bridge would extend a logging road into a new stand of timber. The contract called for a payment of $12 million on completion of the bridge. Work was begun in 20X0 and completed in 20X2. Total costs were as follows: 20X0 ………. $ 2 million20X1 ………. 3 million20X2 ………. 5 millionTotal ………. $10 million1. Suppose the accountant for Reid Construction Company judged that Sierra Logging might not be able to pay the $12 million. a. How much revenue would you recognize each year under current revenue- recognition standards? b. How much revenue would you recognize each year under the proposed revenue- recognition standards? 2. Suppose Sierra Logging is a subsidiary of a major wood products company. Therefore, receipt of payment on the contract is reasonably certain. How much revenue would you recognize each year under current revenue-recognition standards? View Solution:
Sierra Logging Company hired Reid Construction Company to build a

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