COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

3 Months Ended

Jul. 31, 2014

Costs and Estimated Earnings On Uncompleted Contracts

COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

NOTE 5 - 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 July 31, 2014 and April 30, 2014:

	July 31, 2014		April 30, 2014
Costs incurred on uncompleted contracts	$	17,822,248	$	14,457,907
Estimated contract earnings		4,060,106		3,291,077
		21,882,354		17,748,984
Less: Billings to date		22,528,858		18,766,199
Total	$	(646,504)	$	(1,017,215)

	July 31, 2014		April 30, 2014
Costs and estimated earnings in excess of billings on uncompleted contracts	$	567,186	$	431,348
Billings in excess of cost and estimated earnings on uncompleted contracts		1,213,690		1,448,563
Total	$	(646,504)	$	(1,017,215)

Revisions in the estimated gross profits on contracts and contract amounts are made in the period in which circumstances requiring the revisions become known. This increase in gross profit is primarily the result of change orders received of approximately $1,641,000 from the Cooper Project, for costs that were incurred in the prior fiscal year. Although management believes it has established adequate procedures for estimating costs to complete on open contracts, it is at least reasonably possible that additional significant costs could occur on contracts prior to completion.

Although management believes it has established adequate procedures for estimating costs to complete open contracts, additional costs could occur on contracts prior to completion.