Answer the following question:

Part A:

Under the percentage of completion method, $400 of profit has been recognized in prior years on a project with a contract price of $5,000. Total costs incurred to date is $3,000. Estimated costs remaining at end of current year is $3,000. What profit or loss is recognized in the current year? Show your work.

a) $1,000 loss

b) $900 loss

c) $1,000 profit

d) $1,400 loss

Part B:

Which of the following would not be included in Company Sandins year-end inventory reported on the Statement of Financial Position?

a) Goods which Sandin sells as an agent on behalf of Mikheyev Corp

b) Inventory that has been purchased for resale that is currently in transit. Terms are FOB shipping point

c) Goods designated as bill and hold, where all bill and hold criteria are met and Sandin is the buyer

d) Goods that have not met the revenue recognition criteria and are awaiting customer pickup shortly

Part C:

PKF Ltd. purchased $19,000 worth of investments classified as securities available for sale. At the end of the year, the investments were worth $23,000. What is the correct reporting of these events in the direct method Statement of Cash Flows?

a) Add $4,000 in reconciliation of earnings and net operating cash flow

b) Investing cash outflow, $19,000

c) Investing cash outflow, $23,000; subtract $4,000 in reconciliation of earnings and net operating cash flow

d) No disclosure is needed