Ying Construction Company Entered into a Contract to Build a New

question 106

Multiple Choice

Ying Construction Company entered into a contract to build a new airport terminal for $2,500,000. Construction commenced on August 1, 2011, with a planned completion date of December 31, 2013. A summary of the costs, billings, and collections is provided below: Ying uses the percentage of completion method. What amount would appear as accounts receivable on Ying's December 31, 2012 balance sheet?

• A)$100,000
• B)$140,000
• C)$1,000,000
• D)$1,400,000

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Definitions:

Cash Dividend

A payment made by a company out of its profits to its shareholders in the form of cash.

Account Payable

Liabilities of a company that represent its obligations to pay off a short-term debt to its creditors or suppliers.

Temporary Working Capital

Working capital that supports seasonal peaks in business.

Seasonal Businesses

Companies that experience significant fluctuations in business activity due to seasonal factors such as holidays, weather, and consumer habits.