Answer:
Recognized $12.47 million gross profit on the project in 2018.
Explanation:
Total Contract price $160
Total cost incurred during the year 2018 $39
Additional cost <u>$83</u>
Total cost <u>$122</u>
Total profit <u>$38</u>
% cost during the year = (39/122*100) = 31.9672131147541% = 31.97%
Revenue recognized on 2018 = 39*31.97% = $12.4683 = $12.47
Answer:
The incorrect statement is letter "B": If a firm is currently holding a lot of assets in cash, it would benefit from inflation.
Explanation:
Inflation is the economic phenomenon that takes place in the market as a result of a rise in the overall prices. One of the direct causes of inflation is a surplus in demand since it provokes firms to increase the price of the goods or services they offer in an attempt to decrease demand levels but, in given scenarios, the demand continues increasing.
Among the effects of inflation, <em>we can identify the decrease of individuals' and organizations' buying power. The value of money decreases making it inconvenient to have cash handy for both individuals and companies.</em>
Answer:
C. Significant amounts of indirect costs are allocated using only one or two cost pools.
D. All or most indirect costs are identified as output unit-level costs.
E. Products make diverse demands on resources because of differences in volume, process steps, batch size, or complexity.
F. Products that a company is well suited to make and sell show small profits, whereas products that a company is less suited to produce and sell show large profits.
Explanation:
ABC (activity based costs) method focuses on individual activities as the main cost objects. After it determines the cost of individual activities, it uses them as the basis for assigning costs to products and services. ABC method allocates overhead costs based on the main cost objects.
Answer:
Journal entries
Explanation:
The journal entries are shown below:
a. Loss $1,140,000
To Contingent liability $1,140,000
(Being the contingent liability is recorded)
b. Loss $940,000
To Contingent liability $940,000
(Being the contingent liability is recorded)
c. No journal entry is required
d. No journal entry is required
Therefore, only first two journal entries are required