Undersea Construction Ltd commenced the construction of a tunnel under a major river for public transport...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Undersea Construction Ltd commenced the construction of a tunnel under a major river for public transport on 1 July 20X4. It has a fixed-price contract for total revenues of $36 million. The expected completion date is 30 June 20X7. The expected total cost to Undersea Construction at the beginning of the project is $27 million. The following information relates only to the construction of the tunnel: 20X5 20X6 20X7 For the year ending 30 June $'000 $'000 $'000 Costs for the year 5,000 15,000 10,000 Costs incurred to date 5,000 20,000 30,000 Estimated costs to complete 22,000 8,500 Progress billings during the 10,000 22,000 4,000 year Cash collected during the year 9,000 19,000 8,000 Undersea Construction uses the percentage of completion method based on cost to account for its construction contracts. All cost estimates are reliable. 10. If in 20X6, the estimated costs to complete are $18,000 (not $8,500) and the $18,000 cost is indeed incurred in 20X6, the gross profit or loss reported each year by Undersea Construction on this construct will be: (in $'000s) 20X5 20X6 20X7 а) $3,596 $2,000 (loss) $8.000 $2,000 (loss) $5,833 b) $1,667 $zero c) $3,576 $zero d) $1,667 $3,867 (loss) $zero e) $1,667 $3,867 (loss) $4,000 Undersea Construction Ltd commenced the construction of a tunnel under a major river for public transport on 1 July 20X4. It has a fixed-price contract for total revenues of $36 million. The expected completion date is 30 June 20X7. The expected total cost to Undersea Construction at the beginning of the project is $27 million. The following information relates only to the construction of the tunnel: 20X5 20X6 20X7 For the year ending 30 June $'000 $'000 $'000 Costs for the year 5,000 15,000 10,000 Costs incurred to date 5,000 20,000 30,000 Estimated costs to complete 22,000 8,500 Progress billings during the 10,000 22,000 4,000 year Cash collected during the year 9,000 19,000 8,000 Undersea Construction uses the percentage of completion method based on cost to account for its construction contracts. All cost estimates are reliable. 10. If in 20X6, the estimated costs to complete are $18,000 (not $8,500) and the $18,000 cost is indeed incurred in 20X6, the gross profit or loss reported each year by Undersea Construction on this construct will be: (in $'000s) 20X5 20X6 20X7 а) $3,596 $2,000 (loss) $8.000 $2,000 (loss) $5,833 b) $1,667 $zero c) $3,576 $zero d) $1,667 $3,867 (loss) $zero e) $1,667 $3,867 (loss) $4,000
Expert Answer:
Answer rating: 100% (QA)
For year ending 30 June 2015 2016 2017 A Cost incurred to ... View the full answer
Related Book For
Accounting Business Reporting for Decision Making
ISBN: 9780730302414
4th edition
Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver
Posted Date:
Students also viewed these accounting questions
-
The business uses an existing system that performs various functions such as keeping record of financial transactions, store manager responsibilities and activities, point-of-sale (PoS), report...
-
White Ltd commenced business on 1 July 2017. An extract of the statement of financial position of White Ltd for the year ending 30 June 2019 and 2020 are shown below: 2019 $ 3,800 15,000 (600) Assets...
-
On 1 July 2018 Alto Ltd purchased land for $4 000 000, in cash. Alto Ltd uses the cost model to account for land. On 1 July 2018 Alto Ltd purchased equipment for $1 000 000, in cash. Alto Ltd uses...
-
A chemical processing plant has a network of pipes that are used to transfer liquid chemical products from one part of the plant to another. The following pipe network has pipe flow capacities in...
-
How do psychological motives help shape emotional benefits and customer perceptions of value?
-
Explain each of the following observations. (a) When benzyl bromide (PhCH 2 Br) is added to a suspension of potassium fluoride in benzene, no reaction occurs. However, when a catalytic amount of the...
-
Which of the following statements about ensemble methods is false? a. In a boosting ensemble, the training data for an individual model depends on the predictions of the previously constructed...
-
The following are accounting items taken from Tyrone Shoelaces Companys records for 2016: a. Net income, $22,900 b. Payment for purchase of land, $4,000 c. Payment for retirement of bonds, $6,000 d....
-
Suppose Diana has $100,000 to invest in an individual retirement account (IRA) at an interest rate of 10% per year for her retirement in 15 years. How much money can she accumulate at the end of the...
-
The proposed rates were not in the range the CEO expected given the pricing analysis. The CEO has asked the pricing actuary to verify the total projected loss cost excluding potential large storm...
-
1. For all professions, integrity and honesty is core. It is clear that important challenges that might result from the adoption of the hovercraft technology was never mention to key players for the...
-
1-Home produces 2 goods X and Y . Home country has two factors of production, Labor and Capital. All consumers at Home have preferences over two goods that can be represented by the utility function...
-
Imagine an economy that produces only pancakes and maple syrup. a. Draw the PPF and label the axes.Explain why it has the shape that it does. b. Choose 2 efficient points and label them A and B. c....
-
In the supply & demand model of a market, we predict changes in the equilibrium price and equilibrium quantity of a product associated with changes in the non-price determinants of either supply or...
-
A satellite orbiting around the Earth at a distance equal to the Earth's radius R from the surface, has a constant speed v and period T. If this satellite orbited with a constant speed at a distance...
-
In the following table, the supply schedule in the third column equals the cumulative number of pounds of crawfish available for sale at the price indicated. The cumulative total is found by adding...
-
3. The average grades of students of Information Technology in the second semester are as follows: Average Grade Frequency 3 4.51 - 5.00 4.01 -4.50 5 3.51-4.00 14 3.01 -3.50 22 2.51-3.00 24 2.01...
-
Prove the result that the R 2 associated with a restricted least squares estimator is never larger than that associated with the unrestricted least squares estimator. Conclude that imposing...
-
Lakes, Oceans Rivers and Canals Ltd (LORC) builds luxury houseboats. The entity needs funds for expansion. It could take out a fixed rate or variable rate business loan over say 25 years. Another...
-
Compare the calculation of the ARR with the IRR. What advantages does the IRR have compared with the ARR?
-
Using the Conceptual Framework definition and recognition criteria, explain why each of the following items are liabilities.
-
\(\mathrm{NaK}(56 \% / 44 \%)\), which is an alloy of sodium and potassium, is used to cool fast neutron nuclear reactors. The NaK flows at a rate of \(\dot{m}=0.8 \mathrm{~kg} / \mathrm{s}\) through...
-
Heated air required for a food-drying process is generated by passing ambient air at \(20^{\circ} \mathrm{C}\) through long, circular tubes \((D=50 \mathrm{~mm}, L=5 \mathrm{~m}\) ) housed in a steam...
-
Liquid mercury at \(0.25 \mathrm{~kg} / \mathrm{s}\) is to be heated from 325 to \(375 \mathrm{~K}\) by passing it through a \(25-\mathrm{mm}\)-diameter tube whose surface is maintained at \(400...
Study smarter with the SolutionInn App