Question
Tradel Construction Company entered into a contract to build a condominium building for $1,800,000. Construction commenced on July 1, 2020, with a planned completion date
Tradel Construction Company entered into a contract to build a condominium building for
$1,800,000.
Construction commenced on July 1, 2020, with a planned completion date of December 31, 2022. A summary of the related accounting information is provided below:
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Costs incurred during the year | $400,000 | $500,000 | $650,000 |
| Estimated costs to complete at year-end | 1,200,000 | 600,000 | 0 |
| Billings during the year | 360,000 | 440,000 | 1,000,000 |
| Cash collections during the year | 300,000 | 410,000 | 1,090,000 |
How much gross profit would be recognized in 2022 if Tradel uses the completed contract method?
A.
$0
B.
$250,000
C.
$120,000
D.
220,000
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Internal Audit Handbook Management With The SAP Audit Roadmap
Authors: Henning Kagermann, William Kinney, Karlheinz Küting, Claus-Peter Weber, Z. Keil, C. Boecker, J. Busch, O. Bussiek, M. H. Christ, P. Eckes, M. Falk, P. S. Greenberg, B. Reichert, M. Wolf
2008th Edition
3642430392, 978-3642430398
