Ramos, Inc. began work in 2017 on contract #3814. The contract price is $7,200,000. The contract is expected to be completed in 2018. Other details follow: 2017 $1,200,000 3,600,000 1,350,000 900,000 2018 Costs incurred during the year Estimated costs to complete, as of December 31 Billings during the year Collections during the year $3,675,000 5,400,000 5,850,000 Assume that Ramos uses the percentage-of-completion method of accounting and has fiscal years ending on December 31.
Ramos, Inc. began work in 2017 on contract #3814. The contract price is $7,200,000. The contract is expected to be completed in 2018. Other details follow: 2017 $1,200,000 3,600,000 1,350,000 900,000 2018 Costs incurred during the year Estimated costs to complete, as of December 31 Billings during the year Collections during the year $3,675,000 5,400,000 5,850,000 Assume that Ramos uses the percentage-of-completion method of accounting and has fiscal years ending on December 31.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter8: Revenue Recognition, Receivables, And Advances From Customers
Section: Chapter Questions
Problem 34E
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Question
Answer is $5,400,000
Please explain the reasoning and calculations
![Ramos, Inc. began work in 2017 on contract #3814. The contract price is $7,200,000. The
contract is expected to be completed in 2018. Other details follow:
2017
$1,200,000
3,600,000
1,350,000
900,000
2018
Costs incurred during the year
Estimated costs to complete, as of December 31
Billings during the
Collections during the
$3,675,000
year
5,400,000
5,850,000
year
Assume that Ramos uses the percentage-of-completion method of accounting and has fiscal
years ending on December 31.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F55d7d476-142a-464a-9a3c-33461276aa85%2Fa63e24f0-70df-4d47-88e0-4ada637ece1b%2F3uaocfq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Ramos, Inc. began work in 2017 on contract #3814. The contract price is $7,200,000. The
contract is expected to be completed in 2018. Other details follow:
2017
$1,200,000
3,600,000
1,350,000
900,000
2018
Costs incurred during the year
Estimated costs to complete, as of December 31
Billings during the
Collections during the
$3,675,000
year
5,400,000
5,850,000
year
Assume that Ramos uses the percentage-of-completion method of accounting and has fiscal
years ending on December 31.
![3. For the year ended December 31, 2018, Carter would recognize revenue from contract #3814
in the amount of
a. $1,200,000.
b. $1,800,000.
c. $3,675,000.
d. $5,400,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F55d7d476-142a-464a-9a3c-33461276aa85%2Fa63e24f0-70df-4d47-88e0-4ada637ece1b%2Fs9moy2f_processed.jpeg&w=3840&q=75)
Transcribed Image Text:3. For the year ended December 31, 2018, Carter would recognize revenue from contract #3814
in the amount of
a. $1,200,000.
b. $1,800,000.
c. $3,675,000.
d. $5,400,000.
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