COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

6 Months Ended

Oct. 31, 2013

Costs and Estimated Earnings On Uncompleted Contracts

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.Costs and estimated earnings on uncompleted contracts consist of the following at October 31, 2013 and April 30, 2013:

	October 31, 2013		April 30, 2013
Costs incurred on uncompleted contracts	$	50,890,087	$	72,951,142
Provision for loss on uncompleted contracts		(11,972)		(23,376)
Estimated contract profit		1,928,749		2,391,027
		52,806,864		75,318,793
Less: Billings to date		53,655,822		75,858,733
Totals	$	(848,958)	$	(539,940)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	1,149,409	$	1,079,367
Billings in excess of cost and estimated earnings on uncompleted contracts		1,998,367		1,619,307
Totals	$	(848,958)	$	(539,940)

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, 2013, the effect of such revisions in estimated contract profits resulted in an increase to gross profits of approximately $26,000 and $149,000, respectively, and during the three and six months ended October 31, 2012, the effect of such revisions resulted in an increase in gross profits of $1,047,000 and $1,563,000, 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, additional costs could occur on contracts prior to completion.