COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

3 Months Ended

Jul. 31, 2011

Notes to Financial Statements

COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

NOTE 3 - COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

The asset, “Costs and estimated earnings in excess of billings on uncompleted contracts”, represents revenue recognized in excess of amounts billed. The liability, “Billings in excess of costs and estimated earnings on uncompleted contracts”, represents billings in excess of revenue recognized. Although management believes it has established adequate procedures for estimating costs to complete open contracts, additional costs could occur on contracts prior to completion. Costs and estimated earnings on uncompleted contracts consist of the following at July 31, 2011 and April 30, 2011:

	July 31, 2011			April 30, 2011
Costs incurred on uncompleted contracts	$	74,894,886		$	74,468,342
Estimated contract profit		15,307,903			14,355,700
		90,202,789			88,824,042
Less: billings to date		87,824,871			86,194,147
Net excess of costs	$	2,377,918		$	2,629,895
Costs and estimated earnings in excess of billings   on uncompleted contracts	$	4,546,270		$	4,669,012
Billings in excess of costs and estimated earnings
on uncompleted contracts		(2,168,352	)		(2,039,117	)
Net excess of costs	$	2,377,918		$	2,629,895

Revisions in the estimated gross profits on contracts and contract amounts are made in the period in which circumstances requiring the revisions become known. During the three months ended July 31, 2011, the effect of such revisions in estimated contract profits resulted in an increase to gross profits of approximately $406,000, from that which would have been reported had the revised estimates been used as the basis of recognition for contract profits in prior years. Although management believes it has established adequate procedures for estimating costs to complete open contracts, it is at least reasonably possible that additional costs could occur on contracts prior to completion.