Please explain to me how they calculating 10.4 M , 1.4M and also4.4M A construction company entered into a fixed-price contract tobuild an office building for $26 million. Construction costsincurred during the first year were $6 million and estimated coststo complete at the end of the year were $9 million. During thefirst year the company billed its customer $9 million, of which $3million was collected before year-end. What would appear in theyear-end balance sheet related to this contract using thepercentage-of-completion method? (Enter your answers in wholedollars.) Assets: Accounts receivable $6,000,000 Costs plus profitin excess of billings $1,400,000 Explanation: Assets: Accountsreceivable ($9 million – 3 million) = $6,000,000 Cost plus profit($6 million + $4.4 million*) in excess of billing ($9 million) =$1,400,000 * First year gross profit = $10,400,000 – 6,000,000 =$4,400,000
