Nichols Construction Company (NCC)entered into a Contract to Build a Shopping

question 70

Multiple Choice

Nichols Construction Company (NCC) entered into a contract to build a shopping complex for $1,900,000.Construction commenced on July 1,2017,with a planned completion date of December 31,2019.A summary of the related accounting information is provided below:

How much would the balance in accounts receivable be on the balance sheet of NCC at the end of 2019 if NCC uses the percentage of completion method?

• A)$0
• B)$250,000
• C)$290,000
• D)$800,000

Recognize the role and characteristics of documents of title, such as warehouse receipts and bills of lading.

Identify the legal effects of confusion and commingling on property ownership.

Understand the implications of insurable interest and its necessity for purchasing insurance on property.

Grasp the regulations governing the transfer and negotiation of negotiable documents of title.

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Definitions:

Novation

The act of replacing an old obligation with a new one, substituting a new party into an existing agreement or completely replacing the original contract.

Accord And Satisfaction

A legal contract wherein parties agree to settle a dispute by accepting terms that differ from the original obligation.

Novation

The act of replacing an existing obligation with a new one, thereby extinguishing the original obligation.

Substituted Contract

This is a legal agreement replacing an earlier contract, agreed upon by all parties involved, and discharging the original contractual obligations.