Question: On 1 January 2014, Romulus Ltd signed a contract worth $21 000 000 to construct a light rail from Here to There. The light rail

On 1 January 2014, Romulus Ltd signed a contract worth $21 000 000 to construct a light rail from Here to There. The light rail was to be built over three years, with progress payments of $7 000 000 to be made at the end of each year. Estimated costs were $15 000000 and the following costs incurred and paid by Romulus Ltd were in accordance with estimates and represented the percentage completed in each year:

$8 000 000

$5 000 000

$2000000

The project was completed in December 2016.

1 Using the percentage of completion method, what profit would Romulus Ltd report in 2014?

2 Using the percentage of completion method, what profit would Romulus Ltd report in 2015?

3 Using the percentage of completion method, what profit would Romulus Ltd report in 2016?

4 Using the completion of production method, what profit would Romulus Ltd report in 2016?

Step by Step Solution

★★★★★

3.41 Rating (148 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

1 Using the percentage of completion Method Calculate the profit reported ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Human Resource Management Questions!

What payment made at the end of each year for 18 years will amount to $16 000 at 4.2% compounded monthly?

What deposit made at the end of each quarter for 15 years will accumulate to $20 000 at 6% compounded quarterly?

What payment made at the end of each quarter for 15 years will accumulate to $12 000 at 6% compounded monthly?

Cryptic plc extracted its trial balance on 30 June 20X5 as follows: The following information is relevant: (i) The company discontinued a major activity during the year and replaced it with another....

Complexities of CVP Analysis in Multinational Companies Pinero Barrels, Inc. (PBI), manufactures oak barrels for the wine industry at its facility in the United States. One of the raw materials used...

Kartman Corporation is evaluating four real estate investments. Management plans to buy the properties today and sell them three years from today. The annual discount rate for these investments is...

(Multiple Choice) 1. Should the following bond issue costs be expensed as incurred? Underwriting Legal Fees Costs a. No .......... No b. No .......... Yes c. Yes .......... No d. Yes .......... Yes...

(a) On 1 January 20X7 Parent Ltd acquired all the ordinary shares in Daughter Ltd for £16,200 cash. The fair value of the net assets in Daughter Ltd was their book value. (b) The purchase...

(a) On 1 January 20X7 Parent Ltd acquired all the ordinary shares in Daughter Ltd for £16,200 cash. The fair value of the net assets in Daughter Ltd was £12,000. (b) The purchase...

Solar Power Inc, (SPI) is a public company manufacturing and distributing solar panels. SPI has been in existence for 10 year the last three have been as a public company. To date, the company has...

Suppose that the heights of the individuals in a certain population have a normal distribution for which the value of the mean is unknown and the standard deviation is 2 inches. Suppose also that...

Roll a pair of dice. Given that the two dice have different values, find the probability that the sum of the dice is an even number.

Aircraft operators are required to have a set of operations specifications. What are the required contents for the operations specifications of a supplemental carrier? (Worth 14 points: 1 point for...

Su-Ling is a sales representative for a Canadian controlled private corporation that manufactures office furniture. Her gross salary for the year ending December 31, 2020, is $53,000 and, in...

In this exercise, you will compile summary data based on an inventory listing for Educational Endeavors. Then you will determine the inventory balance fora product category using three methods. Last,...

1- The largest relative error for the function f(x,y, z) = where the largest absolute error is 0.08125 and x = 2, y = 3, z = 4 a) 0.05 b) 0.06 c) 0.5 d) 0.6 2- The representation of the number 23.853...

The following information pertains to Kaizen Image Inc. for the year ended December 31, 2019 Kaizen Image Inc. Consolidated Balance Sheet December 31, 2019 Assets Current assets Cash $ 210,000...

the question What is the primary purpose of occupational health and safety committees in the workplace? O a. To conform with provincial legislation O b. To protect employees and keep employers from...

The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-7. Ivan sold the following securities during the year and received a Form 1099-B that...

Carl and Jenny adopt a Russian orphan. The adoption takes 2 years and two trips to Russia and is final in 2012. They pay $6,000 in 2011 and $7,500 in 2012 of qualified adoption expenses, and have AGI...

Jim (age 50) and Martha (age 49) are married with three dependent children. They file a joint return for 2012. Their income from salaries totals $50,000, and they received $10,000 in taxable...

Interscope sells the music of Lady Gaga, who promotes a unique public image and fashion style. Given her huge success, it is likely that by the end of the coming year, multiple performers will be...

Suppose a new product is developed and is supplied by a monopolist with a patent. Compared with the monopoly outcome, indicate whether consumer surplus, producer surplus, and total surplus increase,...

Suppose you have inherited a few acres of land from a relative and you are considering what to do with your inheritance. A farmer with land next to yours offers to buy your acres so he can expand his...