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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

FINANCIAL ACCOUNTING
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: 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
Transcribed Image Text: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
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