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levacccp [35]
3 years ago
8

Red Builders agrees to construct a new building for Blue Co. for a total contract price of $6,000,000. The estimated constructio

n costs at inception was $4,000,000. The construction project was completed after two years. Below are the actual costs for years 1 and 2: DescriptionCumulative Year 1Year 2Cost incurred to date1,200,0002,500,000Estimated additional costs to complete3,600,0002,100,000Billings1,050,0002,300,000Cash Collections1,000,0001,900,000 Red has determined that this contract qualifies for revenue recognition over time (as opposed to upon completion). As a result, Red Builders should have recognized profit at the end of year 1 in the amount of:
Business
1 answer:
Evgesh-ka [11]3 years ago
4 0

Answer: $300,000

Explanation:

Total expected costs = cost incurred to date + estimated cost to complete

                                   = 1,200,000 + 3,600,000

                                   = 4,800,000

Percentage of completion=\frac{Cost\ incurred\ to\ date}{Total\ expected\ cost}\times 100

Percentage of completion=\frac{1,200,000}{4,800,000}\times 100

                                                 = 0.25

                                                 = 25%

Profit = contract revenue - Total expected costs

         = $6,000,000 - 4,800,000

         = $1,200,000

Cumulative gross profit = Profit × Percentage of completion

                                       = $1,200,000 × 0.25

                                       = $300,000

Therefore, Red Builders should have recognized profit at the end of year 1 in the amount of $300,000.

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Prime Corporation liquidates its ​85% owned subsidiary Bass Corporation under the provisions of Secs. 332 and 337. Bass Corporat
aliya0001 [1]

Answer:

$20000 gain for John Corporation and $10000 loss for Bass Corporation.

Explanation:

John Corporation gain(loss) = FMV of property - Liability assumed - Stock basis

                                               = 55000-10000-25000

                                               = 20000

Bass Corporation gain/loss = 55000-65000

                                              = - 10000

Therefore,  $20000 gain for John Corporation and $10000 loss for Bass Corporation.

5 0
3 years ago
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Alenkasestr [34]

She may be entitled to protection under the <u>Business Judgement Rule</u>, which is a doctrine that courts generally defer to the business decisions of company executives when the decisions were in good faith.  

4 0
3 years ago
On January 3, 2019, Carey discovers his diamond bracelet has been stolen. The bracelet had a fair market value and adjusted basi
Mama L [17]

Answer: $1,900

Explanation:

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3 0
3 years ago
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Luda [366]

Answer:

True.

Explanation:

To write a professional letter, some standard format rules need to be followed.

It is necessary that the letter is written using a formal vocabulary, with clear and precise information, in the appropriate format, containing date, information about your professional profile, about the company and a final greeting.

To achieve an important objective, such as getting a job, it is important to have good writing skills to write a professional letter, in order to demonstrate through your arguments, your skills and competences, which can contribute to the success of a company.

6 0
3 years ago
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5 0
3 years ago
Read 2 more answers
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