PLease present in good accounting form. Luigi Company is building two construction projects. The following information relate to these projectsduring the year. Any costs incurred are expected to be recoverable.Project 1Project 2Contact Price10,500,0007,500,000Costs incurred to date6,000,0007,000,0001,000,000Estimated costs to completeBillings during the yearCollections during the year3,000,0007,000,0001,000,0006,000,0001,000,000What amount of gross profit or loss should the company report in its income statement for the year?Over timePoint in timeA. 562,500B. 500,000C. 500,000D. (500,000)(500,000)(500,000)500,000

Gross profit: Gross profit is the profit that a company earns after deducting the costs associated…

Fing the year. Any costs incurred are Pr ontact Price 10 osts incurred to date stimated costs to complete llings during the year pllections during the year 6, 3, 7, б, at amount of gross proffit or locs s nt of arors cofit or locs ol mlN 6

Fing the year. Any costs incurred are Pr ontact Price 10 osts incurred to date stimated costs to complete llings during the year pllections during the year 6, 3, 7, б, at amount of gross proffit or locs s nt of arors cofit or locs ol mlN 6

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

PLease present in good accounting form.

Luigi Company is building two construction projects. The following information relate to these projects
during the year. Any costs incurred are expected to be recoverable.
Project 1
Project 2
Contact Price
10,500,000
7,500,000
Costs incurred to date
6,000,000
7,000,000
1,000,000
Estimated costs to complete
Billings during the year
Collections during the year
3,000,000
7,000,000
1,000,000
6,000,000
1,000,000
What amount of gross profit or loss should the company report in its income statement for the year?
Over time
Point in time
A. 562,500
B. 500,000
C. 500,000
D. (500,000)
(500,000)
(500,000)
500,000

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