During 2020 the Tonka Corp. began construction for which it will invoice a total of $...
During 2020 the Tonka Corp. began construction for which it will invoice a total of $ 600,000. The project ended on December 15, 2021. Additional information related to this project is presented below: 2020 2021 Costs incurred in the period $ 225,000 $ 255,000 Estimated costs to complete the project 225,000 -0- Customer billing 240,000 360,000 Cash Received from Clients 200,000 400,000 Assuming Tonka uses the CONTRACT COMPLETED method, what will be the gross profit reported in the 2020 Statement of Income and Expenses related to this project?
Select one: a. $ 75,000 b. $ 345,000 c. $ 0 d. $ 120,000
Homework Answers
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Tonka uses the CONTRACT COMPLETED method, the gross profit will be reported in the 2020 Statement of Income and Expenses related to this project will be $ 0 because under completed contract method, Revenue is recognized in the year of completion only & gross profit will be reported at the same time. |
| Correct answer is option C . |
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