Exhibit 18-2 the Following Information Relates to a Project of the Sarasota

question 38

Multiple Choice

Exhibit 18-2 The following information relates to a project of the Sarasota Construction Company:
$\begin{array}{llll}&2010&2011&2012\\\text { Construction costs incurred } & \$ 136,000 & \$ 546,500 & \$ 200,000 \\\text { Estimated costs to complete } & 714,000 & 227,500 & --\end{array}$

The contract price was $1, 000, 000.Sarasota used the percentage-of-completion method of revenue recognition.
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Refer to Exhibit 18-2.What amount of gross profit was recognized in 2012?

• A)$ 29, 375
• B)$ 50, 000
• C)$117, 500
• D)$150, 000

Calculate the threshold amounts for revenue, profit or loss, and assets to identify reportable segments.

Identify the components necessary for disaggregation in financial reporting.

Apply the 75% revenue test for determining reportable segments.

Understand the criteria for combining operating segments for reporting purposes.

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Definitions:

Trichromatic Theory

A theory of color vision that proposes three types of color receptor cells in the eye, each sensitive to red, green, or blue.

Opponent Process Theory

A psychological and neurological model that explains a wide range of behaviors, including vision and emotions, by positing that certain mechanisms are controlled by pairs of opposing processes.

Colour Vision

The ability of the eye to distinguish objects based on the wavelengths (or frequencies) of the light they reflect, emit, or transmit.

Debate

A structured discussion or argument where opposing viewpoints are presented and defended with evidence and reasoning.