1. (TCO A) Platypus Building Inc. won a bid for a new office building contract. Below is info from the project accountant: Total Construction Fixed Price $8,000,000 Construction Start Date March 3, 2012 Construction Complete Date December 4, 2013 As of Dec 31 2012 2013 Actual cost incurred $2,500,000 $3,150,000 Estimated remaining costs $3,750,000 $- Billed to customer $2,400,000 $5,300,000 Received from customer $2,250,000 $5,400,000 Assuming Platypus Building Inc. uses the completed contract method, what amount of gross profit would be recognized in 2013? 1. $2,000,000 2. $2,350,000 3. $1,650,000 4. $940,000 2. (TCO A) Kerry Corp purchased a used bottling machine from Bob's Bottling Inc. on Jan 1, 2012 for $2100000. Bob accounted for the sale correctly under the installment sales method. It had a book value of $1575000. Kerry paid with $300000 cash and a note for $1800000 with an annual interest of 10%. Kerry agreed to make equal annual payments of $600000. Kerry Corp made their first payment on Jan 1, 2013 of $780000 which included interest of $180000 to date of payment. As of Dec 31, 2013 Bob has deferred gross profit of ? 1. $255,000 2. $330,000 3. $375,000 4. $300,000 3. (TCO A) Blue Suede Construction Corp used the percentage-of-completion method of revenue recognition. They were contracted to build the new amphitheater for $800000. Additional information was provided: As of Dec 31. 2012 2013 Percentage of completion 15% 40% Estimated total expected costs $550,000 $580,000 Gross profit recognized (Cumulative) $50,000 $99,000 Contracted costs incurred during 2013 were (Points : 5) 1. $145,000 2. $149,500 3. $151,000 4. $232,000 4. (TCO A) In industries with high rates of return (such as a magazine distribution company) an alternative method of revenue recognition would be record sales net of an estimate of expected future returns record sales in current period and returns in future periods as they occur do not record any sales until expiration of all return privileges have passed all of the above