Astor Construction Company Uses the Percentage-Of-Completion Method for Long-Term Construction

question 63

Multiple Choice

Astor Construction Company uses the percentage-of-completion method for long-term construction contracts.A specific job was begun in 2014 and completed in 2016.The contract price was $1,400,000 and cost information as of each year-end is given below:

Assuming Astor correctly recorded gross profit in 2014,how much gross profit should the company record in 2015?

• A)$0
• B)$20,000
• C)$300,000
• D)$320,000

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Definitions:

Confidence Interval

An interval of figures obtained from statistics of a sample, expected to include the value of a hidden population parameter.

Level of Significance

A predetermined value that indicates the probability of rejecting a true null hypothesis in hypothesis testing.

Chi-Squared Variable

A variable that follows the chi-squared distribution, typically used in tests of independence and goodness-of-fit.

Degrees of Freedom

The sum of independent quantities or values able to be set for a statistical distribution.