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andriy [413]
2 years ago
6

Horner Construction Co. uses the percentage-of-completion method. In 2014, Horner began work on a contract for $16,500,000; it w

as completed in 2015. The following cost data pertain to this contract :
Year ended December 31
2014 2015
Costs incurred during the year $5,850,000 $4,200,000
Estimated costs to complete at the end of year 3,900,000 —
If the completed-contract method of accounting was used, the amount of gross profit to be recognized for years 2014 and 2015 would be ____________?
Business
1 answer:
Leno4ka [110]2 years ago
8 0

Answer:

2014 =  zero

2015 = $6,450

Explanation:

2014

Under the completed-contract method of accounting, revenue, expenses, and gross profit is deferred until the completion of the contract.  If at the end of the business fiscal year of a company work on a contract remains incomplete, no revenue, expenses, and profit on that contract is recognized in the current year on the income statement; all costs and billings are accumulated in respective balance sheet accounts.

2015

This year, the construction is completed so Horner Construction Co. will now recognize its Revenue and gross profit in relation to the project.

            Contract price          $16,500,000

Less:     constructions costs   <u>10,050,000</u>

             Gross profit             $6,450,000

* construction cost    =    ($5,850,000 + $4,200,000)  

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Komok [63]

Answer:

<u>Contribution Margin Income Statement for the year end MM DD, YY</u>

                                                                      $                $

Sales revenue ($100 per unit)                                    66,000

Less: Variable Cost

Less cost of goods sold ($56 per unit)   36,960

Commissions expense ($6 per unit)         3,960

Shipping expense ($3 per unit)               <u>  1,980  </u>

                                                                                   <u>  42,900 </u>

Contribution Margin                                                    23,100

Less: Fixed Cost

Salaries expense                                        7,900

Advertising expense                                <u>  5,800  </u>

                                                                                   <u>  13,700 </u>

Net Income                                                                 <u>  9,400</u>

5 0
3 years ago
A company purchased $3,600 worth of merchandise. transportation costs were an additional $315. the company later returned $250 w
Anestetic [448]

Answer: $3,564.50

Explanation:

The total amount that the company will pay for the merchandise is the net cost of the merchandise, less a 3% cash discount, plus the transportation costs. The cash discount normally only applies to the merchandise and not the transportation costs.

The cost of the merchandise is $3,600 less the $250 refund, which equals $3,350. With a 3% cash discount they will pay 97% of this amount, which is $3,249.50. After adding the additional transportation charge of $315, the total amount to be paid is $3,564.50.

6 0
3 years ago
Stock Company has 2,000 units in beginning work in process inventory, 20% complete as to conversion costs, 23,000 units transfer
ss7ja [257]

Answer:

B. 26,000, 24,000.

Explanation:

Stock Company

Equivalent units

Particulars                 Units       % of Completion           Equivalent Units

                                                   Mat. Conversion          Mat.  Conversion

Transferred Out      23000         100         100           23000      23000

<u>Ending WIP              3000            100       331/3%       3000        999.9= 1000</u>

<u>Total Equivalent units                                                  26000        24000</u>

<u />

The Equivalent units can be calculated either by adding the units transferred out and ending WIP or by adding beginning WIP and units started.

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3 0
3 years ago
Select the best answer for the question.
BlackZzzverrR [31]

Answer:

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4 0
2 years ago
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alexira [117]

Answer:

Trough

Explanation:

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7 0
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