COSTS, ESTIMATED EARNINGS AND BILLINGS ON UNCOMPLETED CONTRACTS

12 Months Ended

Jan. 31, 2016

COSTS, ESTIMATED EARNINGS AND BILLINGS ON UNCOMPLETED CONTRACTS

COSTS, ESTIMATED EARNINGS AND BILLINGS ON UNCOMPLETED CONTRACTS

NOTE 8 — COSTS, ESTIMATED EARNINGS AND BILLINGS ON UNCOMPLETED CONTRACTS

The Company’s billing practices on long-term contracts are governed primarily by the contract terms of each project based on the achievement of milestones, pre-agreed schedules or progress towards completion approved by the project owner. Billings do not necessarily correlate with revenues recognized under the percentage-of-completion method of accounting. The tables below set forth the aggregate amount of costs incurred and earnings accrued on uncompleted contracts compared with the billings on those contracts through January 31, 2016 and 2015, and reconcile the net amounts of billings in excess of costs and estimated earnings to the amounts included in the consolidated balance sheets as of those dates.

	2016			2015
Costs incurred on uncompleted contracts	$	764,071		$	324,839
Estimated accrued earnings	116,326			60,809
	880,397			385,648
Less - billings to date	982,182			546,757
	$	(101,785	)	$	(161,109	)

	2016			2015
Costs and estimated earnings in excess of billings	$	4,078		$	455
Billings in excess of costs and estimated earnings	105,863			161,564
	$	(101,785	)	$	(161,109	)

Contract costs include all direct costs, such as material and labor, and those indirect costs related to contract performance such as payroll taxes, insurance, job supervision and equipment charges. The amounts of costs and estimated earnings in excess of billings are expected to be billed and collected in the normal course of business. Contract costs included amounts billed to the Company for delivered goods and services totaling $10,416,000 that were retained and included in the Company’s accounts payable as of January 31, 2016. Most of this amount will be paid within one year.