A construction company entered into a fixed-price contract to build an office building for $34 million.

A construction company entered into a fixed-price contract to build an office building for $34 million. Construction costs incurred during the first year were $12 million and estimated costs to complete at the end of the year were $18 million. During the first year the company billed its customer $12 million, of which $5 million was collected before year-end.