Question

Use the following information to answer MCQ21 to MCQ23

On January 1st, 2018, Crane Construction Corporation signed a contract to construct a building with a contract price of $18,000,000. The company expects to get this contract completed by 2020. Crane uses the percentage of completion method Information relating to the costs, billings, and collections for this contract is as follows:

                                                                             2018                   2019                  2020   

Total costs incurred to date                            $4,500,000            $7,920,000          $13,800,000

Estimated costs to complete                            7,500,000              5,280,000                     -0-

Customer billings to date                                  6,600,000            12,000,000            16,800,000

Collections to date                                            6,000,000            10,500,000            16,500,000

What is the percentage of completion for the year 2019?

Select one:

a. 0.26

b. 0.375

c. 0.66

d. 0.60

What is the gross profit that Crane Cor to recognize in 2020?

Select one:

a. $4,200,000

b. $2,250,000

c. $6,000,000

d. $1,320,000

How much the cost incurred in the year 2019 only:

Select one:

a. $7,920,000

b. $13,200,000

c. $3,420,000

d. $5,280,000

Answer 1