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During 2012, Nilsen Company started a construction job with a contract price of $1,600,000. The job was completed in 2014. The following information is available.
Instructions
(a) Compute the amount of gross profit to be recognized each year, assuming the percentage-of completion method is used.
(b) Prepare all necessary journal entries for 2013.
(c) Compute the amount of gross profit to be recognized each year, assuming the completed-contract method isused.
Taxable income includes $80,000 of dividends from a 10%-owned domestic corporation. Water paid fines and penalties of $6,000 that were not deducted in computing taxable income.
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Evaluates the amount of materials handling overhead cost that should be allocated to the company's two products.
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