Rothbart Manufacturing agrees to manufacture bumper cars for Banners AmusementParks. Under the terms of the contract, Banners will pay Rothbart a total of $78,000,and Banners can cancel the contract if it so chooses but must pay Rothbart for workcompleted. Rothbart believes that, if Banners cancelled the contract, Rothbart could sellthe bumper cars to another amusement park and still make a profit. The manufacturingcontract is expected to last six months, and as of December 31, 2024, the job is 80%complete. How much revenue should Rothbart recognize in 2024 for this contract?Multiple Choice$0O $78,000$15,600$62,900

Revenue recognition When the title to the items moves from the seller to the buyer, the revenue…

the bumper cars to another amusement park and still make a profit. The manufacturing contract is expected to last six months, and as of December 31, 2024, the job is 80% complete. How much revenue should Rothbart recognize in 2024 for this contract? Multiple Choice $0 $78,000 O $15,600 $62,900

the bumper cars to another amusement park and still make a profit. The manufacturing contract is expected to last six months, and as of December 31, 2024, the job is 80% complete. How much revenue should Rothbart recognize in 2024 for this contract? Multiple Choice $0 $78,000 O $15,600 $62,900

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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Can someone help me with this problem? It is very long and I don't know how to begin this. Assume Avaya contracted to provide a customer with Internet infrastructure for $2,350,000. The project began in 2024 and was completed in 2025. Data relating to the contract are summarized below: 2024 2025 Costs incurred during the year $ 328,000 $ 1,830,000 Estimated costs to complete as of 12/31 1,312,000 0 Billings during the year 436,000 1,690,000 Cash collections during the year 341,000 1,785,000 Required: Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming Avaya recognizes revenue over time according to percentage of completion. Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming this project does not qualify for revenue recognition over time. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming…
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12. Beaver Co., a construction firm, enters into a contract to buila a dam for a customer. The contract price is total construction costs plus 20% thereof. However, the variable fee increases to 25% if the project is completed within three years. Beaver Co. incurs the following costs: 20x1 20x2 20x3 Costs incurred each year 10,500,000 14,300,000 6,000,000 Estimated costs to complete 19,500,000 6,200,000 In 20x1, it is not highly probable that the additional fee will be received. However, after a change in circumstances in 20x2, it is now highly probable that the additional fee will be received. Beaver Co. uses the percentage of completion method based on costs. How much profit is recognized in 20x3? a. 850,000 b. 980,000 c. 1,200,000 d. 1,500,000