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This year, Kinza Company, a local manufacturer of off-shore drilling platforms, entered into a contract to construct a drilling platform that will be placed in
This year, Kinza Company, a local manufacturer of off-shore drilling platforms, entered into a contract to construct a drilling platform that will be placed in the North Atlantic Ocean. The total contract price is $6,000,000, and Kinza estimates the total construction cost at $4,000,000. Actual costs incurred this year are $1,000,000. If Kinza uses the percentage of completion method, the gross profit for this year is A) $0. B) $400,000. C) $500,000. D) $2,000,000.
This year, Kinza Company, a local manufacturer of off-shore drilling platforms, entered into a contract to construct a drilling platform that will be placed in the North Atlantic Ocean. The total contract price is $6,000,000, and Kinza estimates the total construction cost at $4,000,000. Actual costs incurred this year are $1,000,000. If Kinza uses the percentage of completion method, the gross profit for this year is
A) $0.
B) $400,000.
C) $500,000.
D) $2,000,000.
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Fundamental Accounting Principles
Authors: Larson Kermit, Tilly Jensen
Volume I, 14th Canadian Edition
978-0071051507
