1). Mars Corporation uses the percentage-of-completion method. At the end of the first year of a $9,000,000...
Question:
1). Mars Corporation uses the percentage-of-completion method. At the end of the first year of a $9,000,000 contract, the following information is available:
Costs to date: | $2,000,000 |
Estimated costs to complete | 6,000,000 |
Progress billings during the year | 1,800,000 |
Cash collected during the year | 1,500,000 |
In the first year, Mars should recognize gross profit of
a | $750,000 |
b | $250,000 |
c | $1,000,000 |
d | $300,000 |
2). Mars Corporation uses the completed-contract method. At the end of the first year of a $9,000,000 contract, the following information is available:
Costs to date: | $2,000,000 |
Estimated costs to complete | 6,000,000 |
Progress billings during the year | 1,800,000 |
Cash collected during the year | 1,500,000 |
In the first year, Mars should recognize gross profit of
a | $1,000,000 |
b | $300,000 |
c | $0 |
d | $250,000 |
Financial and Managerial Accounting
ISBN: 978-0538480895
11th Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren