COSTS INCURRED ON UNCOMPLETED CONTRACTS

9 Months Ended

Dec. 31, 2011

COSTS INCURRED ON UNCOMPLETED CONTRACTS

COSTS INCURRED ON UNCOMPLETED CONTRACTS

NOTE 4 – COSTS INCURRED ON UNCOMPLETED CONTRACTS

Costs incurred on uncompleted contracts are comprised of the following:

	December 31, 2011			March 31, 2011
Costs incurred on uncompleted contracts, beginning balance	$	7,624,209		$	5,149,663
Plus: Total costs incurred on contracts during the period	23,227,520			24,842,866
Less: Cost of sales during the period	(22,105,308		)	(22,368,320		)
Cost incurred on uncompleted contracts, ending balance	$	8,746,421		$	7,624,209
Billings on uncompleted contracts, beginning balance	$	5,104,301		$	2,399,815
Plus: Total billings incurred on contracts during the period	25,895,499			34,988,721
Less: Contracts recognized as revenue during the period	(27,187,618		)	(32,284,235		)
Billings on uncompleted contracts, ending balance	$	3,812,182		$	5,104,301
Costs incurred on uncompleted contracts, ending balance	$	8,746,421		$	7,624,209
Billings on uncompleted contracts, ending balance	(3,812,182		)	(5,104,301		)
Costs incurred on uncompleted contracts, in excess of progress billings	$	4,934,239		$	2,519,908

Contract costs consist primarily of labor and materials and related overhead, to the extent that such costs are recoverable. Revenues associated with these matters is recorded only when the amount of recovery can be estimated reliably and realization is probable.

As of December 31, 2011 and March 31, 2011, the Company had deferred revenues totaling $154,057 and $382,130, respectively.  Deferred revenues represent customer prepayments on their contracts and completed contracts on which all revenue recognition criteria were not met.  Costs incurred on uncompleted contracts in excess of progress billings are net of allowances for losses of $566,396 and $333,944 at December 31, 2011 and March 31, 2011, respectively. Advance billing and deposits includes down payments for acquisition of materials and progress payments on contracts.  The agreements with the buyers of the Company’s products allow the Company to offset the progress payments against the costs incurred.