Lesson: Percentage-of-Completion Example

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In this lesson, Nick Palazzolo, CPA, brings the Percentage-of-Completion method to life with a comprehensive example involving Mighty Construction Inc. and their contract to build a new warehouse. He meticulously walks through the process of revenue recognition under accrual basis GAAP for a long-term contract, illustrating how to calculate the progress of the project and recognize revenue and gross profit at various completion stages. Key points include sifting through the data to identify relevant figures, adjusting for changes in cost estimates, and navigating the complexities that arise when numbers aren't as clean-cut as desired. Nick also shows how to ensure there's no double-counting of revenue and the approach to finalize gross profit recognition, all while highlighting common pitfalls and the importance of checking work for accuracy.

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Financial Statement Accounts
Module: 9 Concepts, 123 Videos
Cash and Cash Equivalents Overview and Objectives
1:54
Introduction to Cash and Cash Equivalents
1:48
Cash Restriction Classification
0:53
Cash Balance Calculation Example
4:05
Bank Reconciliation
2:17
Cash and Cash Equivalents Summary
0:46
Cash and cash equivalents - Practice Questions
6:08
Trade Receivables Overview and Objectives
1:34
BASE Formula
1:31
Recording Cash Discounts
2:16
Valuing Accounts Receivable
3:09
Accounting for Uncollectible Receivables
4:47
Recognizing Notes Receivable
4:03
Disposing of Accounts Receivable and Notes Receivable
7:07
Trade Discounts
3:33
Writing Off of Accounts Receivable
3:09
Accounts Receivable Aging Schedule
1:29
Bad Debt Expense
3:35
Trade Receivables Summary
1:29
Trade receivables - Practice Questions
4:43
Inventory Overview and Objectives
1:51
Inventory Classification
0:49
Cost Flow of Manufacturing Companies
1:09
Items Included in the Inventory Account
2:03
Title Transfer: FOB Shipping Point and FOB Destination
3:58
Effects of Overstating and Understating Inventory
1:51
Costs Included in Inventory
1:27
Cost Flow Methods
1:31
Inventory Valuation Using LIFO and FIFO
4:05
Cost Flow Methods Examples
7:08
The LIFO Reserve Concept
2:48
Removing LIFO Inventory Layers
2:46
Dollar Value LIFO Example
2:52
LIFO Advantages and Disadvantages
1:21
Example of FIFO Valuation
4:56
Example of Weighted Average Valuation
1:24
Example of Moving Average Valuation
2:45
Example of LIFO Valuation: Periodic Inventory System
1:40
Example of LIFO Valuation: Perpetual Inventory System
1:52
Inventory Summary
2:35
Inventory - Practice Questions
9:46
Property, Plant and Equipment Overview and Objectives
2:47
Introduction to Property, Plant and Equipment
1:13
Cost of Acquiring Fixed Assets
2:12
Land Costs
1:28
Plant Costs
3:00
Improvements to Property, Plant and Equipment
1:04
Equipment Costs
3:04
Capitalizing vs Expensing
3:33
Interest Capitalization
3:31
Property, Plant and Equipment Calculation Examples
3:48
Valuation Issues
1:39
Exchanges of Nonmonetary Assets
2:17
Disposal of Property, Plant and Equipment
3:59
Costs Subsequent to Acquisition
0:34
Asset Disposal Journal Entries
4:24
Net Book Value Calculation
1:22
Composite Depreciation
1:18
Property, Plant and Equipment Summary
1:17
Property, plant and equipment - Practice Questions
5:27
Intangibles Overview and Objectives
2:55
Tangible Versus Intangible Assets
1:38
Classification of Intangible Assets
3:30
Valuation of Intangible Assets
5:00
Capitalization of Costs
2:42
Amortization of Intangibles
3:37
Treatment of Start-up Costs
2:15
Franchisee Accounting
3:54
Franchisee Accounting Example
3:27
Goodwill from Business Combinations
4:29
Goodwill Impairment
2:27
Goodwill Impairment Example
2:03
Intangibles Summary
1:09
Intangibles - Practice Questions
4:04
Payables and Accrued Liabilities Overview and Objectives
1:47
Current Liabilities
2:10
Recording Accounts Payable
6:03
Notes Payable
1:08
Current Portions of Long Term Debt
1:41
Dividends Payable and Returnable Deposits
2:19
Unearned Revenue
1:36
Sales Taxes and Income Taxes Payable
1:10
Analysis of Current Liabilities
1:37
Long Term Debt
1:28
Exit and Disposal Activities
5:46
Payables and Accrued Liabilities Summary
1:07
Payables and accrued liabilities - Practice Questions
6:29
Equity Overview
1:14
Equity Objectives
0:55
Stockholders Rights
0:58
Stockholders Equity Components
5:26
Basics of Common Stock
3:03
Additional Paid-In Capital
1:44
Basics of Treasury Stock
2:04
Treasury Stock at Cost Method
4:46
Basics of Preferred Stock
4:09
Types of Preferred Stock
2:32
Stock Options and Stock Appreciation Rights
18:09
Types of Dividends
7:03
Statement of Stockholders Equity
0:38
Formulas for Equity Analysis
0:37
Equity Summary
1:10
Equity - Practice Questions
9:52
Revenue Recognition Overview
1:16
Revenue Recognition Objectives
1:09
Guidelines for Revenue Recognition
6:56
Revenue Recognition Before Delivery
3:31
Percentage-of-Completion Method
5:44
Percentage-of-Completion Example
5:38
Recognizing Losses on Long Term Contracts
1:58
Revenue Recognition Summary
0:34
Revenue Recognition - Practice Questions
3:24
Income Taxes Overview and Objectives
1:12
Basics of Deferred Taxes
1:26
Temporary Differences Between Income Tax Expense and Income Tax Liability
4:11
Permanent Differences Between Income Tax Expense and Income Tax Liability
0:54
Deferred Tax Assets and Liabilities
3:24
Deferred Taxes - Tax Rates
0:50
Revision of Future Tax Rates
0:33
Balance Sheet Presentation of Deferred Taxes
1:17
Net Operating Losses
1:47
Income Taxes Summary
0:31
Income taxes - Practice Questions
5:25