Use the Following Information for the Following Questions:
Folk Construction

question 77

Multiple Choice

Use the following information for the following questions:
Folk Construction Corp. began operations in 2020. Construction activity for 2020 is shown below. Folk uses the completed-contract method.
$\begin{array}{c}\begin{array}{c}\\\\\underline{ \text { Contract}}\\1 \\2 \\3\end{array}\begin{array}{c}\\\text {Contract}\\\underline{ \text {Price}}\\\$ 1,280,000 \\ 1,440,000 \\1,320,000 \end{array}\begin{array}{c}\text {Billings}\\\text {Through}\\\underline{12 / 31 / 20 }\\\$ 1,260,000 \\600,000 \\760,000\end{array}\begin{array}{c}\text {Collections}\\\text {Through Costs to}\\\underline{12 / 31 / 20 }\\ \$ 1,040,000 \\400,000 \\700,000\end{array}\begin{array}{c}\text {Estimated}\\\text {Costs to}\\\underline{12 / 31 / 20}\\\$ 860,000\\328,000\\900,000\end{array}\begin{array}{c}\\\\\underline{ \text {Complete}}\\-\\\$ 752,000 \\480,000\end{array}\end{array}$

-Which of the following should be shown on the statement of financial position at December 31, 2020 related to Contract 2?

• A) inventory, $ 272,000
• B) inventory, $ 328,000
• C) liability, $ 272,000
• D) liability, $ 600,000

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Definitions:

Empirical Rule

A statistical rule stating that for a normal distribution, nearly all data will fall within three standard deviations of the mean.

Bell-Shaped

Describes the graphical form of a distribution that is symmetric around its mean, visually represented as a bell-shaped curve, typically associated with the normal distribution.

Sample Standard Deviation

A measure of the dispersion or variability of a sample dataset, indicating how much the individual data points differ from the sample mean.

Range

The difference between the highest and lowest values in a dataset, providing a measure of spread.