Question: Rizzo, Inc. is constructing a building for a client. The company began work in 2023 on a contract for $24,350,000. Other data are as follows:

Rizzo, Inc. is constructing a building for a client. The company began work in 2023 on a contract for $24,350,000. Other data are as follows:

2023 2024
Costs incurred to date $15,000,000 $23,000,000
Estimated costs to complete 7,500,000
Billings to date 8,000,000 24,350,000
Collections to date 6,500,000 22,500,000

Rizzo uses the completed-contract method, what gross profit should the company recognize in 2024?

Question 21 options:

a)

$1,350,000

b)

$116,667

c)

$24,350,000

d)

$0.00

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
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 Accounting Questions!

Q:

Question 8 (1 point) Gray Construction enters into a contract with a customer to build a warehouse for $950,000 on March 30, 2022 with a performance bonus of $50,000 if the building is completed by...

Q:

Question 4 (1 point) Spilker Construction Company had a contract starting April 2023, to construct a $34,500,000 building that is expected to be completed in September 2025, at an estimated cost of...

Q:

Question 16 (1 point) On January 2, 2022, Rizzo Corp. acquires $300,000 of Happ Company's 10-year, 10% bonds at a price of $319,254 to yield 9%. Interest is payable each December 31. The bonds are...

Q:

Rizzo, Inc. is constructing a building for a client. The company began work in 2023 on a contract for $24,350,000. Other data are as follows: 2023 2024 Costs incurred to date $15,000,000 $23,000,000...

Q:

Lichliter, Inc. is constructing a building for a client. The company began work in 2023 on a contract for $24,350,000. Other data are as follows: 2023 2024 Costs incurred to date $15,000,000...

Q:

Lichliter, Inc. is constructing a building for a client. The company began work in 2023 on a contract for $24,350,000. Other data are as follows: 2023 2024 Costs incurred to date $15,000,000...

Q:

SunMoon, Inc. is constructing a building for a client. The company began work in 2020 on a contract for $24,350,000. Other data are as follows: 2020 2021 Costs incurred to date $15,000,000...

Q:

In accounting for long-term construction-type contract the difference between Billings and Construction in Progressie Select one O Recognized on the balance sheet as a net asset or liability b....

Q:

1.How much is the Gross Profit/Loss Realized in 2018?* Celestial Holdings Co. began constructing a condominium on January 1, 2017 for a contract price of P1,250,000. The entity has assured collection...

Q:

16. Meridith company provided the following information: January 1, 2014 December 31, 2014 Accounts receivable 2,400,000 Allowance for doubtful accounts 120,000 Sales on account 16,000,000 Cash...

Q:

Discuss some ways a large insurance company such as Allstate, Progressive, or State Farm might use social media tools such as blogs, wikis, or social networking. Do you think these tools are more...

Q:

Amit holds 20 shares of Rs. 10.00 each on which he had paid Rs. 2.00 per share on application but could not pay Rs. 3.00 per share on allotment and Rs. 1.00 per share on first call. The journal entry...

Q:

Generally speaking, police are very effective in relation to crime Question 1 1 options: True False

Q:

In each of the following, derive the conclusions from the premises. Make sure each line of your derivation is numbered, and each line is justified by citing the relevant line numbers above it and the...