Robin Construction Company Began a Long-Term Contract in 2019

question 61

Multiple Choice

Robin Construction Company began a long-term contract in 2019.The contract price was $800,000.The estimated cost of the contract at the time it was begun was $500,000.The actual cost incurred in 2019 was $350,000.The contract was completed in 2020 and the cost incurred that year was $125,000.Under the percentage of completion method:

• A)Robin should report $300,000 of income in 2019.
• B)Robin should report $90,000 of income in 2020.
• C)Robin will receive interest (under the look-back method) on the underpayment of taxes in 2019.
• D)Robin should report $325,000 of income in 2019.
• E)None of these is correct.

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Definitions:

NonAromatic

Molecules or compounds that do not contain a ring of continuously overlapping p orbitals, thus lacking the stability associated with aromatic systems.

π Network

An extended system of π bonds in a molecule, which can involve multiple atoms contributing p orbitals for delocalized electron sharing.

Cyclobutadiene

A highly reactive, four-carbon cyclic diene that is unstable at room temperature, interesting for its peculiar electronic properties and symmetry.

1,3-Butadiene

A simple conjugated diene with the formula C4H6, important as a monomer in producing synthetic rubber.