Assume that gomez uses the percentage of completion

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76. Assume that Gomez uses the percentage-of-completion method of accounting. The portion of the total gross profit to be recognized as income in 2010 is a. $450,000. b. $600,000. c. $1,800,000. d. $2,400,000. 77. Assume that Gomez uses the completed-contract method of accounting. The portion of the total gross profit to be recognized as income in 2011 is Use the following information for questions 78 and 79. Kiner, Inc. began work in 2010 on a contract for $8,400,000. Other data are as follows: 2010 2011 Costs incurred to date $3,600,000 $5,600,000 Estimated costs to complete 2,400,000 Billings to date 2,800,000 8,400,000 Collections to date 2,000,000 7,200,000 78. If Kiner uses the percentage-of-completion method, the gross profit to be recognized in 2010 is 79. If Kiner uses the completed-contract method, the gross profit to be recognized in 2011 is Use the following information for questions 80 and 81. 80. Horner Construction Co. uses the percentage-of-completion method. In 2010, Horner began work on a contract for $5,500,000; it was completed in 2011. The following cost data pertain to this contract: Year Ended December 31 2010 2011 Cost incurred during the year $1,950,000 $1,400,000 Estimated costs to complete at the end of year 1,300,000 The amount of gross profit to be recognized on the income statement for the year ended December 31, 2011 is a. $800,000. b. $860,000. c. $900,000. d. $2,150,000. 18 - 18
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Revenue Recognition 81. If the completed-contract method of accounting was used, the amount of gross profit to be recognized for years 2010 and 2011 would be 2010 2011 82. Remington Construction Company uses the percentage-of-completion method. During 2010, the company entered into a fixed-price contract to construct a building for Sherman Company for $30,000,000. The following details pertain to the contract: At December 31, 2010 At December 31, 2011 Percentage of completion 25% 60% Estimated total cost of contract $22,500,000 $25,000,000 Gross profit recognized to date 1,875,000 3,000,000 The amount of construction costs incurred during 2011 was Use the following information for questions 83 and 84. Eilert Construction Company had a contract starting April 2011, to construct a $15,000,000 building that is expected to be completed in September 2012, at an estimated cost of $13,750,000. At the end of 2011, the costs to date were $6,325,000 and the estimated total costs to complete had not changed. The progress billings during 2011 were $3,000,000 and the cash collected during 2011 was $2,000,000. Eilert uses the percentage-of-completion method.
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