Question: Tim Construction Co. began operations in 2014. Construction activity for 2014 is shown below. Tim uses the completed contract method. Contract Contract Price Billings Collections Costs Through Through 12/31/14 12/31/14 to Estimated 12/31/14 Costs Complete to 1 2 3 $5,200,000 $3,500,000 $2,600,000 $3,000,000 $1,000,000 $3,600,000 $1,500,000 $1,000,000 $800,000 $1,600,000 $3,600,000 $1,900,000 $1,800,000 $2,250,000 $1,200,000 What amount of Gross Profit should Tim show on the Income Statement of 2014 related to Contract 3? a.) $0 b.) $150,000 loss c.) $150,000 profit d.) None of the above
Question: Tim Construction Co. began operations in 2014. Construction activity for 2014 is shown below. Tim uses the completed contract method. Contract Contract Price Billings Collections Costs Through Through 12/31/14 12/31/14 to Estimated 12/31/14 Costs Complete to 1 2 3 $5,200,000 $3,500,000 $2,600,000 $3,000,000 $1,000,000 $3,600,000 $1,500,000 $1,000,000 $800,000 $1,600,000 $3,600,000 $1,900,000 $1,800,000 $2,250,000 $1,200,000 What amount of Gross Profit should Tim show on the Income Statement of 2014 related to Contract 3? a.) $0 b.) $150,000 loss c.) $150,000 profit d.) None of the above
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Tim Construction Co. began operations in 2014. Construction activity for
2014 is shown below. Tim uses the completed contract method.
Contract Contract
Price
Billings
Collections Costs
Through
Through
12/31/14 12/31/14
to Estimated
12/31/14 Costs
Complete
to
1
2
3
$5,200,000 $3,500,000 $2,600,000 $3,000,000 $1,000,000
$3,600,000 $1,500,000 $1,000,000 $800,000 $1,600,000
$3,600,000 $1,900,000 $1,800,000 $2,250,000 $1,200,000
What amount of Gross Profit should Tim show on the Income Statement of
2014 related to Contract 3?
a.) $0
b.) $150,000 loss
c.) $150,000 profit
d.) None of the above
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