[hopeful_cpa]

I just don’t get this.

during 2009, m corp started a construction job with a total contract price of 600k. the job was completed 12/15/10. additional data are as follows:

actual costs incurred 2009: 225,000 2010: 255,000

estimated remaining costs 2009: 255,000 2010: blank

billed to customer 2009: 240,000 2010: 360,000

received from customer 2009: 200,000 2010: 400,000

under the completed contract method, what amount should m recognized as gross profit for 2010?

BEC: Done
REG: Done
AUD: Done
FAR: Done

I'M DONE!!!!!! AAAAAAAAAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[Anonymous]

I believe that because it's completed contract, you only recognize the income when the job is completed. That being said, you charged $600,000, had total costs of $480,000 ($225,000 + $255,000), so your gross profit its $120,000. All of this gets recognized in 2010 because it's completed contract. Someone please correct me if I'm wrong.

[Haldius]

I'm with Entourage on this one. All of the profit will be recognized upon completion.

REG (5/31/12) - 90
FAR (7/12/12) - 85
AUD (8/23/12) - 91
BEC (10/13/12) - 85

Using Becker 2012 Materials, Self-Study

[hopeful_cpa]

AAAHHHHH… gotcha!! now it makes sense…

geez, i wish people on this board would write the answer explanations for these prep courses.

BEC: Done
REG: Done
AUD: Done
FAR: Done

I'M DONE!!!!!! AAAAAAAAAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[Author]

Replies