18. Antoine Construction Company has consistently used the percentage-of complet

Question

18. Antoine Construction Company has consistently used the percentage-of completion method of income. During 2014, Antoine entered into a fixed-price contract to construct an office building for $10,000,000. Information relating to the contract is as follows: er 31 2014 2015 Percentage of completion Estimated total cost at completion 608 ....$7,500,000$8,000,000 1,200, 000 Income recognized (cumulative) 500,000 Contract costs incurred during 2015 were a. $3,500,000. b. $3,200,000. c. $3,300,000. d. $4,800,000. Johann Builders has a fixed-price contract providing $120,000 of revenue. Construction on the contract was begun in 2013 and was completed in 2014. Information relating to the contract is as follows: 19. 2013 2014 Cumulative cost incurred to the end of the year S 40,000 105,000 60,000 38,000 46,000 Expected costs to complete 120,000 120,000 Billings to the end of the year Collections to the end of the year What amount of income should Johann recognize in 2014 assuming that the company appropriately uses the percentage-of-completion method of income recognition? a. $7,000 b. $9,286 c. $17,000 d. $15,000 20. An analysis and aging of accounts receivable of the Gibson Company at December 31, 2014, showed the following: Allowance for Doubtful Accounts 36,000 (cr) 76,800 Accounts estimated to be uncollectible . Compute the net realizable value of the accounts receivable of Gibson Company at December 31, 2014. a. $723,2 b. $804,000 $799,200 $727,200

Explanation / Answer

8000000 * 60% = 4800000 is the 2014 completion

7500000 * 20% = 1500000 is the 2015 completion

4800000 - 1500000 = 3500000

So answer is a. 3500000

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