Use the Following Information for Questions

question 19

Multiple Choice

Use the following information for questions.
In 2017, Hip-hop Inc.began a three year construction contract for $7,000,000.Hip-hop uses the percentage-of-completion method.The income to be recognized each year is based on the proportion of costs incurred to total estimated costs for completing the contract.The financial statement presentation relating to this contract for calendar 2017 follow:
-What was the initial estimated gross profit on this contract?

• A)$762,860
• B)$810,462
• C)$1,300,408
• D)$1,729,412

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Definitions:

Budgeting

The process of creating a plan to spend your money, outlining expected revenues and expenses for a future period.

Actual Results

The real outcomes or results of business activities, measured in terms of performance, revenue, or profits, compared against planned or forecasted outcomes.

Shipping Container

A large, standard-sized metal box used for the transport of goods by sea or land.

Refurbishment

The process of cleaning, decorating, and re-equipping to make something look new or to restore it to good condition.