NR 015 Indiana Co. began a construction project in 2013 that will provide it $15
ID: 2579990 • Letter: N
Question
NR 015 Indiana Co. began a construction project in 2013 that will provide it $150 million when it is completed in 2015. During 2013, Indiana incurred $36 million of costs and estimates an additional $84 million of costs to complete the project. Suppose that, in 2014, Indiana incurred costs of $63.75 million and estimated an additional $42.75 million in costs to complete the project. Using the percentage-of-completion method, Indiana: Recognized $3.75 million loss on the project in 2014. Recognized $5.25 million gross profit on the project in 2014. Recognized $7.5 million gross profit on the project in 2014. None of the other answers is correct. A. B. C. D. Na 016 Summary data for Benedict Construction Co.'s (BCC) Job 1227, which was completed in 2013, are presented below: $450.000 (180.000) (195.000) 75,000 Bid price Contract cost 2012 2013 Gross profit Estimated cost to complete 12 31 2012 $200,000 12 31 2013Explanation / Answer
Q15
Ans: A. Recognized $ 3.75 million loss on the project in 2014
Workings ( in $ millions)
Q16.
Ans Recognized $ 33,165 as profit on the project in 2013 and recognized $ 41,835 as profit on the project in 2014
Workings ( in $ )
Particulars 2013 2014 a Cost incurred till date 36 99.75 b Estimated cost to be incurred in future 84 42.75 c Total Cost 120 142.50 d Percentage of completion (a/c) 30% 70% e Total contract revenue 150 150 f revenue to be booked till date (d*e) 45 105 g Cost incurred till date 36 99.75 h Profit till date (f-g) 9 5.25 i Profit booked in the earlier years 0 9 j Profit to be booked in the year 9 -3.75Related Questions
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