Classical Ltd $\text { Estimated costs to complete as of December } \ldots \ldots \ldots \ldots \ldots \ldots360,000\quad\quad-$

question 19

Multiple Choice

Classical Ltd. Began work in 2020 on a contract for $ 1,250,000. Other data are: $\quad \quad\quad \quad\quad \quad\quad \quad\quad \quad\quad \quad\quad \quad\quad \quad\quad \quad \quad\quad \quad\quad \quad\quad\quad \quad\quad \underline{2020}\quad \quad\quad \quad\underline{2021}$
$\text { Costs incurred to date }\ldots \ldots \ldots \ldots\ldots \ldots \ldots \ldots\ldots \ldots \ldots \ldots\ldots \ldots \$540,000\quad\quad \$335,000$
$\text { Estimated costs to complete as of December } \ldots \ldots \ldots \ldots \ldots \ldots360,000\quad\quad-$
$\text { 31 Billings to date}\ldots \ldots \ldots \ldots\ldots \ldots \ldots \ldots\ldots \ldots \ldots \ldots\ldots \ldots \ldots \ldots420,000\quad\quad 1,250,000$
$\text { Collections to date} \ldots \ldots \ldots\ldots\ldots\ldots \ldots \ldots \ldots\ldots \ldots \ldots \ldots\ldots \ldots \ldots 300,000\quad\quad1,000,000$
If Classical uses the completed-contract method, the gross profit to be recognized in 2021 is

• A) $ 375,000.
• B) $ 400,000.
• C) $ 850,000.
• D) $ 1,000,000.

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Definitions:

Negative Y Values

Represent values below the horizontal axis in a Cartesian coordinate system, typically indicating a decrease or loss.

Accurately Positioning

The precise placement or alignment of components in relation to each other or to a reference point, crucial for the correct functioning of mechanical systems.

Fixture

A device used to securely hold an object in place during manufacturing or testing processes.

Set-Up Point

In manufacturing, a specific point or position on a machine or work piece that serves as a reference for the start of a process or operation.