Gomez, Inc. began work in 2022 on contract #3814, which provided for a contract price of $19,200,000. Other details follow: 2022 2023 Costs incurred during the year $3,200,000 $9,800,000 Estimated costs to complete, as of December 31 9,600,000 0 Billings during the year 3,600,000 14,400,000 Collections during the year 2,400,000 15,600,000 Assume that Gomez uses the percentage-of-completion method of accounting. The portion of the total gross profit to be recognized as income in 2022 is a. $1,200,000.00 b. $1,600,000.00 c. $4,800,000.00 d. $6,400,000.00 Assume that Gomez uses the percentage-of-completion method of accounting. The portion of the total revenue to be recognized in 2022 is a. $1,200,000.00 b. $1,600,000.00 c. $4,800,000.00 d. $6,400,000.00 Now assume that Gomez uses the completed-contract method of accounting. The portion of the total gross profit to be recognized as income in 2023 is a. $2,400,000.00 b. $3,600,000.00 c. $6,200,000.00 d. $19,200,000.00
Gomez, Inc. began work in 2022 on contract #3814, which provided for a contract price of $19,200,000. Other details follow: 2022 2023 Costs incurred during the year $3,200,000 $9,800,000 Estimated costs to complete, as of December 31 9,600,000 0 Billings during the year 3,600,000 14,400,000 Collections during the year 2,400,000 15,600,000 Assume that Gomez uses the percentage-of-completion method of accounting. The portion of the total gross profit to be recognized as income in 2022 is a. $1,200,000.00 b. $1,600,000.00 c. $4,800,000.00 d. $6,400,000.00 Assume that Gomez uses the percentage-of-completion method of accounting. The portion of the total revenue to be recognized in 2022 is a. $1,200,000.00 b. $1,600,000.00 c. $4,800,000.00 d. $6,400,000.00 Now assume that Gomez uses the completed-contract method of accounting. The portion of the total gross profit to be recognized as income in 2023 is a. $2,400,000.00 b. $3,600,000.00 c. $6,200,000.00 d. $19,200,000.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
| Gomez, Inc. began work in 2022 on contract #3814, which provided for a contract price of $19,200,000. Other details follow: | |||||
| 2022 | 2023 | ||||
| Costs incurred during the year | $3,200,000 | $9,800,000 | |||
| Estimated costs to complete, as of December 31 | 9,600,000 | 0 | |||
| Billings during the year | 3,600,000 | 14,400,000 | |||
| Collections during the year | 2,400,000 | 15,600,000 | |||
| Assume that Gomez uses the percentage-of-completion method of accounting. The portion of the total gross profit to be recognized as income in 2022 is | |||||
| a. | $1,200,000.00 | ||||
| b. | $1,600,000.00 | ||||
| c. | $4,800,000.00 | ||||
| d. | $6,400,000.00 | ||||
| Assume that Gomez uses the percentage-of-completion method of accounting. The portion of the total revenue to be recognized in 2022 is | |||||
| a. | $1,200,000.00 | ||||
| b. | $1,600,000.00 | ||||
| c. | $4,800,000.00 | ||||
| d. | $6,400,000.00 | ||||
| Now assume that Gomez uses the completed-contract method of accounting. The portion of the total gross profit to be recognized as income in 2023 is | |||||
| a. | $2,400,000.00 | ||||
| b. | $3,600,000.00 | ||||
| c. | $6,200,000.00 | ||||
| d. | $19,200,000.00 | ||||
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