On March 31, 2016, Big Boats Company entered into a contract with Vacations Unlimited to produce a
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On March 31, 2016, Big Boats Company entered into a contract with Vacations Unlimited to produce a state-of-the-art cruise ship, to 1x? completed within three years. Big Boats estimated the total cost of building the ship at $300 million. The contract price was $400 million. The ship was completed on February 15, 2019-
a. What tax accounting method must Big Boats use for the contract? Why?
b. Using the financial data provided relating to the contract’s performance, complete the following schedule:
c. What are the consequences of the total cost of $360 million exceeding the estimated total cost of $300 million?
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a Big Boats must use the percentage of completion method because the contract is lo...View the full answer
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Related Book For 
South-Western Federal Taxation 2019 Comprehensive
ISBN: 9781337703017
42th Edition
Authors: David M. Maloney, William A. Raabe, William H. Hoffman, James C. Young
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