5 Quiz Help Save &Exit; Subm Indiana Co. began a construction project in 2018 wi

Question

5 Quiz Help Save &Exit; Subm Indiana Co. began a construction project in 2018 with a contract price of $162 milion to be received when the project is completed in 2020 During 2018, Indiana incurred $33 miion of costs and estimates an additional $88 milion of costs to complete the project Indiana recognizes revenue over time and for this project recognizes revenue over ime according to the percentage of the project that has been completed Suppose that, in 2019, Indiana incurred additional costs of $63 million and estimated an additional $52 milion in costs to complete the project Indiana (Do not round your percentage calculated Mutiple Choice Recognized $51 milion gross proft on the project in 2019 Recognized $3.00 million loss on the project in 2019 Prev 6 o o Next MacBook Air 8 5

Explanation / Answer

Ans: Loss to be recognized in 2019 is 2.1million

2018 2019 Contract price 162 162 Incurred in 2018 33 33 Incurred in 2019 33 63 Estimates Additional Cost 88 52 Total cost 121 148 Profit 41 14 rec in 2018 11.2 9.1 Profit recognised already in 2018 11.2 Loss to be recognized in 2019 -2.1 percentage to be rec (33/121) 0.27 0.65 33/121 (33+63)/148

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