Reference no: EM132969410
Question - Construction Company started work on the three job sites during the current year. Data relating to the three jobs given below:
Batangas Site
Contract Price 500,000
Costs Incurred 375,000
Estimated Costs to complete 0
Billing on Contract 500,000
Collections on contract 400,000
Laguna Site
Contract Price 700,000
Costs incurred 100,000
Estimated to complete 400,000
Billings on contract 100,000
Collections on contract 50,000
Pampanga Site
Contract Price 250,000
Costs incurred 100,000
Estimated to complete 100,000
Billings on contract 0
Collections on contract 0
1. What amount of income should be reported for the current year if the zero profit method is used for all contracts?
A. 100,000
B. 125,000
C. 240,000
D. 375,000
2. What amount of income should be reported for the current year if the percentage of completion method is used for all contracts?
A. 65,000
B. 190,000
C. 215,000
D. 240,000
3. What would be the amount of construction in progress to be reported on the year-end balance sheet if the percentage of completion method is used?
A. 165,000
B. 265,000
C. 575,000
D. 785,000