COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

6 Months Ended

Oct. 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 October 31, 2011 and April 30, 2011:

	October 31, 2011			April 30, 2011
Costs incurred on uncompleted contracts	$	71,519,673		$	74,468,342
Estimated contract profit		11,332,078			14,355,700
		82,851,751			88,824,042
Less: billings to date		82,169,390			86,194,147
Net excess of costs	$	682,361		$	2,629,895
Costs and estimated earnings in excess of billings   on uncompleted contracts	$	3,292,698		$	4,669,012
Billings in excess of costs and estimated earnings
on uncompleted contracts		(2,610,337	)		(2,039,117	)
Net excess of costs	$	682,361		$	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 and six months ended October 31, 2011, the effect of such revisions in estimated contract profits resulted in a decrease to gross profits of approximately $1,368,000 and $542,000, respectively, 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.