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Tullis Construction Enters into a Long-Term Fixed Price Contract to Build

question 56

Multiple Choice

Tullis Construction enters into a long-term fixed price contract to build an office tower for $22,000,000. In the first year of the contract, Tullis incurs $9,000,000 of cost and the engineers determined that the remaining costs to complete are $5,000,000. Tullis billed $11,000,000 in year 1 and collected $4,100,000 by the end of the end of the year. Refer to Tullis Construction. How much should Tullis report as Accounts Receivable at the end of year 1 on the balance sheet assuming the use of the percentage-of-completion method? (Do not round intermediary calculations, and round your final answer to the nearest whole dollar.)

Distinguish between different types of sales contracts (e.g., sale on approval, sale or return) and understand the implications for risk of loss and title transfer.

Recognize the special provisions for buyers in the ordinary course of business.

Analyze the impact of UCC provisions on contract enforceability and the imposition of good faith requirements.

Understand the UCC's approach to risk of loss during the transfer of goods, including international transactions.

Definitions:

Asthenosphere

The highly viscous, mechanically weak, and ductilely deforming region of the upper mantle of the Earth.

Decompression

The process of reducing pressure in a physical system, often leading to the release of dissolved gases or the formation of bubbles in a liquid.

Solid Mantle

The thick layer of solid rock between the Earth's crust and its liquid outer core, involved in plate tectonics and volcanic activity.

Earthquakes

Natural phenomena caused by a sudden release of energy in the Earth's crust, leading to ground shaking and, in some cases, causing great destruction.