Question
Kiner, Inc. began work in 2018 on a contract for €21,000,000. Other data are as follows:...
Kiner, Inc. began work in 2018 on a contract for €21,000,000. Other data are as follows:
2018 2019
Costs incurred to date €9,000,000 €14,000,000
Estimated costs to complete 6,000,000 —
Billings to date 7,000,000 21,000,000
Collections to date 5,000,000 18,000,000
8. If Kiner uses the percentage-of-completion method, the gross profit to be recognized in 2018 is
A. €3,600,000.
B. €4,000,000.
C. €5,400,000.
D. €6,000,000.
9. If Kiner uses the cost-recovery method, the gross profit to be recognized in 2019 is
A. €3,400,000.
B. €7,000,000.
C. €3,500,000.
D. €14,000,000.
10. Remington Construction Company uses the percentage-of-completion method. During 2018, the company entered into a fixed-price contract to construct a building for Sherman Company for £36,000,000. The following details pertain to the contract:
At December 31, 2018 At December 31, 2019
Percentage of completion 25% 60%
Estimated total cost of contract £27,000,000 £30,000,000
Gross profit recognized to date 2,250,000 3,600,000
The amount of construction costs incurred during 2019 was
A. £18,000,000.
B. £11,250,000.
C. £6,750,000.
D. £3,000,000.
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