COSTS AND ESTIMATED EARNINGS ON CONTRACTS IN PROGRESS

9 Months Ended

Sep. 30, 2020

COSTS AND ESTIMATED EARNINGS ON CONTRACTS IN PROGRESS

COSTS AND ESTIMATED EARNINGS ON CONTRACTS IN PROGRESS

NOTE 10 - COSTS AND ESTIMATED EARNINGS ON CONTRACTS IN PROGRESS

Costs and estimated earnings on contracts in progress, net of progress billings, are as follows as of September 30, 2020 and December 31, 2019:

Costs incurred on contracts in progress	$	498,190	$	240,732
Estimated net earnings thereon		541,728		42,403
Total costs and estimated earnings		1,039,918		283,135
Billings to date		(1,407,925)		(1,127,466)
Net overbilled	$	(368,007)	$	(844,331)
Contract Assets	$	—	$	—
Contract Liabilities (Deferred Revenue)		(368,007)		(844,331)
	$	(368,007)	$	(844,331)

Contract assets represent amounts earned under contracts in progress but not yet billed under the terms of those contracts. These amounts become billable according to the contract terms, which usually consider passage of time, achievement of certain milestones or completion of the project. Substantially all costs and estimated earnings in excess of billings on contracts in progress are expected to be billed and collected in the following year.

Contract liabilities represent billings to customers in excess of costs and earnings on contracts in progress. Substantially all such amounts are expected to be earned in the following year.