Consider a Project That Was Correctly Accounted for Under the Percentage-Of-Completion

question 57

Multiple Choice

Consider a project that was correctly accounted for under the percentage-of-completion method.At the end of the project, the construction in process account includes total debits and credits of $3.5 Mill.Assuming that gross profit of $1.2 Mill.was recognized throughout the contract, total constructions costs were:

• A)$2.3 Mill.
• B)$3.5 Mill.
• C)$2.1 Mill.
• D)$4.6 Mill.

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Definitions:

Swap Contract

A financial agreement where two parties exchange liabilities or cash flows from two different financial instruments for a set period.

Forward Contracts

Customized contracts between two parties to buy or sell an asset at a specified price on a future date.

Stock Brokers

Professionals or firms that execute buy and sell orders for stocks and other securities on behalf of their clients, in exchange for a fee or commission.

Swap Transactions

Financial agreements between two parties to exchange cash flows or other financial instruments over a specified period.