Contract Price Biling Through 12/31/15 Collections Through 12/31/15 Estimated Co
ID: 2475403 • Letter: C
Question
Contract
Price
Biling
Through
12/31/15
Collections
Through
12/31/15
Estimated
Cost to
12/31/15
Cost to
Complete
3,600,000
Gorman Construction Co. began operations in 2015. Construction activity for 2015 is shown below. Gorman uses the completed-contract method.
12. Which of the following should be shown on the income statement for 2015 related to Contract 1?
a. Gross profit, $675,000
b. Gross profit, $1,500,000
c. Gross profit, $1,575,000
d. Gross profit, $900,000
13. Which of the following should be shown on the balance sheet at December 31, 2015 related to Contract 2?
a. Inventory, $680,000
b. Inventory, $820,000
c. Current liability, $680,000
d. Current liability, $1,500,000
14. Which of the following should be shown on the balance sheet at December 31, 2015 related to Contract 3?
a. Inventory, $200,000
b. Inventory, $350,000
c. Inventory, $2,100,000
d. Inventory, $2,250,000
ContractContract
Price
Biling
Through
12/31/15
Collections
Through
12/31/15
Estimated
Cost to
12/31/15
Cost to
Complete
1 4,800,000 4,725,000 3,900,000 3,225,000 ---- 23,600,000
1,500,000 1,000,000 820,000 1,800,000 3 3,300,000 1,900,000 1,800,000 2,250,000 1,200,000Explanation / Answer
12) option (c) $1,575,000 (4,800,000-3,225,000)
13) (c) current liability $680,000 (billings 1,500,000 - costs 820,000)
14) (b) inventory $350,000 (2,250,000 - 1,900,000)
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.