Boing Companies began operations on January 1, 2020. The company only has one client for whom it is building an airplane at a price of $ 2,000,000. The costs incurred during 2020 and directly related to the construction of the aircraft were $ 375,000. The company estimates that the total costs required to complete construction is $ 1,125,000. The following is the partial financial statement of the Boing Company for 2020.

BOING COMPANIES

Statement of Financial Position

As of December 31, 2020

ASSETS:

Current assets:

Cash

$ 100,000

Accounts Receivable

150,000

Inventory:

Construction in Progreso

375,000

Construction in Progreso

(350,000)

 25,000

Other current assets

 225,000

Total Current Assets

$ 500,000

Based on the information provided, what method is Boing using to account for the construction contract?

Select one: 

a. Percentage of Completion

b. Can't determine

c. Term Sales

d. Contract Completed

Answer rating: 100% (QA)

The method followed by the ... View the full answer