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3. CONTRACT ACCOUNTING AND ACCOUNTS RECEIVABLE
 12 Months Ended
Dec. 31, 2012
Contract Accounting And Accounts Receivable  
NOTE 3. CONTRACT ACCOUNTING AND ACCOUNTS RECEIVABLE

3. CONTRACT ACCOUNTING AND ACCOUNTS RECEIVABLE

 

Costs and estimated earnings in excess of billings on uncompleted contracts represent accumulated contract costs that exceeded billings and/or cash received on uncompleted contracts accounted for under the percentage completion contract method (See Note 1). There were no such contracts as of December 31, 2012.

 

At December 31, 2011, costs and estimated earnings in excess of billings on uncompleted contracts consisted of the following for contracts using the percentage of completion method of accounting:

 

Revenues Recognized   $ 302,378  
Less: Billings or cash receipts on uncompleted contracts     (259,798 )
Costs and estimated earnings in excess of billings on uncompleted contracts   $ 42,580  

 

Billings in excess of costs and estimated earnings on uncompleted contracts represents billings and/or cash received that exceed accumulated revenues recognized on uncompleted contracts accounted for under the percentage of completion contract method (See Note 1).

 

At December 31, 2012, billings in excess of costs and estimated earnings on uncompleted contracts consisted of the following for contracts accounted for using the percentage of completion method of accounting:

 

Billings and/or cash receipts on uncompleted contract   $ 60,000  
Less: Revenues recognized     (33,162 )
Billings in excess of costs and estimated earnings on uncompleted contracts   $ 26,838  

 

At December 31, 2011, billings in excess of costs and estimated earnings on uncompleted contracts consisted of the following for contracts accounted for using the percentage of completion method of accounting:

 

Billings and/or cash receipts on uncompleted contract   $ 1,743,753  
Less: Revenues recognized     (1,640,832 )
Billings in excess of costs and estimated earnings on uncompleted contracts   $ 102,921  

 

The Company records accounts receivable related to its construction contracts and its design services based on billings or on amounts due under the contractual terms. The allowance for doubtful accounts is based upon the Company’s policy. Accounts receivable throughout the year may decrease based on payments received, credits for change orders, or back charges incurred.

 

At December 31, 2012 and 2011, accounts receivable were as follows:

 

    December 31, 2012     December 31, 2011  
Accounts receivable   $ 342,770     $ 1,472,716  
Less: Allowance for doubtful accounts     (13,254 )     (27,742 )
Accounts receivable, Net   $ 329,516     $ 1,444,974  

 

Bad debt expense (recovery) for 2012 and 2011 was ($14,488) and $14,488, respectively.