Quiz Ch. 18

Quiz Ch. 18 - 1. Seasons Construction is constructing an...

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1. Seasons Construction is constructing an office building under contract for Cannon Company. The contract calls for progress billings and payments of $930,000 each quarter. The total contract price is $11,160,000 and Seasons estimates total costs of $10,650,000. Seasons estimates that the building will take 3 years to complete, and commences construction on January 2, 2012. At December 31, 2013, Seasons Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $10,800,000 due to unanticipated price increases. What is the total amount of Construction Expenses that Seasons will recognize for the year ended December 31, 2013? A. $4,792,500 B. $4,725,000 C. $8,100,000 D. $4,905,000 2. Eilert Construction Company had a contract starting April 2013, to construct a $18,000,000 building that is expected to be completed in September 2014, at an estimated cost of $16,500,000. At the end of 2013, the costs to date were $7,590,000 and the estimated total costs to complete had not changed. The progress billings during 2013 were $3,600,000 and the cash collected during 2013 was $2,400,000. Eilert uses the percentage-of-completion method. At December 31, 2013, Eilert would report Construction in Process in the amount of A. $7,080,000. B. $7,590,000. C. $690,000.
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This note was uploaded on 01/16/2012 for the course BUS 312 taught by Professor Account during the Spring '11 term at IUPUI.

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Quiz Ch. 18 - 1. Seasons Construction is constructing an...

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