ch18 practice

# 21 c 28 d 35 b 42 c 49 b 56 b 63 a 22 b 29 c 36 a 43

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21. c 28. d 35. b 42. c 49. b 56. b *63. a 22. b 29. c 36. a 43. d 50. b 57. d *64. d 23. a 30. d 37. b 44. a 51. c *58. b 24. b 31. b 38. d 45. d 52. d *59. d 25. d 32. c 39. a 46. b 53. b *60. d 26. b 33. b 40. c 47. c 54. b *61. a 27. d 34. c 41. a 48. c 55. d *62. b 18 - 14

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Revenue Recognition MULTIPLE CHOICE —Computational Use the following information for questions 65-68: Seasons Construction is constructing an office building under contract for Cannon Cafe. The contract calls for progress billings and payments of \$620,000 each quarter. The total contract price is \$7,440,000 and Seasons estimates total costs of \$7,100,000. Seasons estimates that the building will take 3 years to complete, and commences construction on January 2, 2010. 65. At December 31, 2010, Seasons estimates that it is 30% complete with the construction, based on costs incurred. What is the total amount of Revenue from Long-Term Contracts recognized for 2010 and what is the balance in the Accounts Receivable account assuming Cannon Cafe has not yet made its last quarterly payment? Revenue Accounts Receivable a. \$2,480,000 \$2,480,000 b. \$2,130,000 \$ 620,000 c. \$2,232,000 \$ 620,000 d. \$2,130,000 \$2,480,000 66. At December 31, 2011, Seasons Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to \$7,200,000 due to unanticipated price increases. What is the total amount of Construction Expenses that Seasons will recognize for the year ended December 31, 2011? 67. At December 31, 2011, Seasons Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to \$7,200,000 due to unanticipated price increases. What is reported in the balance sheet at December 31, 2011 for Seasons as the difference between the Construction in Process and the Billings on Construction in Process accounts, and is it a debit or a credit? Difference between the accounts Debit/Credit 68. Seasons Construction completes the remaining 25% of the building construction on December 31, 2012, as scheduled. At that time the total costs of construction are \$7,500,000. What is the total amount of Revenue from Long-Term Contracts and Construction Expenses that Seasons will recognize for the year ended December 31, 2012? Revenue Expenses 18 - 15
The following information relates to questions 69 and 70. Cooper Construction Company had a contract starting April 2010, to construct a \$9,000,000 building that is expected to be completed in September 2012, at an estimated cost of \$8,250,000. At the end of 2010, the costs to date were \$3,795,000 and the estimated total costs to complete had not changed. The progress billings during 2010 were \$1,800,000 and the cash collected during 2010 was 1,200,000.

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