Reference no: EM131068575
Use the following to answer questions 29-30:
Gomez, Inc. began work in 2010 on contract #3814, which provided for a contract price of $7,200,000. Other details follow:
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2010
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2011
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Costs incurred during the year
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$1,200,000
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$3,675,000
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Estimated costs to complete, as of December 31
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3,600,000
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0
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Billings during the year
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1,350,000
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5,400,000
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Collections during the year
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900,000
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5,850,000
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29. Assume that Gomez uses the percentage-of-completion method of accounting. The portion of the total gross profit to be recognized as income in 2010 is
A) $450,000. B) $600,000. C) $1,800,000. D) $2,400,000.
30. Assume that Gomez uses the completed-contract method of accounting. The portion of the total gross profit to be recognized as income in 2011 is
A) $900,000. B) $1,350,000. C) $2,325,000. D) $7,200,000
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