Luke's Construction Receives a Contract to Build a Bridge for $6

question 63

Multiple Choice

Luke's Construction receives a contract to build a bridge for $6 000 000,with an estimated cost of $4 000 000.Over the three-year construction period,the costs are estimated to be $500 000 in Year 1,$3 200 000 in Year 2 and $300 000 in Year 3.How much construction revenue would be reported in Year 2 using the percentage of completion method?

• A)$2 300 000
• B)$2 800 000
• C)$4 800 000
• D)$3 200 000

Understanding expense recognition principles and their application to matching expenses against revenues.

Understand the factors and components involved in calculating the loss on sale of a business component.

Differentiate between revenues and gains as well as understand the nuances and GAAP provisions regarding their distinction.

Identify elements included and excluded from the calculation of the cost of goods sold.

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Definitions:

Power Consumption

The amount of electrical energy used by devices or infrastructure within a specific timeframe, often measured in kilowatt-hours (kWh).

Standard Deviation

An analytical tool used to determine the level of variability or divergence among data values.

Appropriate Hypotheses

Hypotheses that are suitably formulated for statistical testing, including a null hypothesis and an alternative hypothesis in the context of an experiment or study.

Power Consumption

This refers to the amount of electrical energy used by devices over time, typically measured in kilowatt-hours (kWh).