Use the Following Information for the Following Questions:
in 2020 $\ldots \ldots \ldots \ldots \ldots \ldots \ldots\$150,000$

question 7

Multiple Choice

Use the following information for the following questions:
In 2020, Cement Inc. began a three year construction contract for $ 3,500,000. Cement uses the percentage-of-completion method. The income to be recognized each year is based on the proportion of costs incurred to total estimated costs for completing the contract. The financial statement presentation relating to this contract for calendar 2020 follow:
Statement of Financial Position
Current assets:
Accounts receivable $\ldots \ldots \ldots \ldots \ldots \ldots \ldots\$150,000$
Contract asset/liability $\ldots \ldots \ldots \ldots \ldots \ldots \ldots105,000$
Contract costs $\$ 425,000$ less Billings of $\$ 320,000$ )

Income Statement
Income (before tax) on the contract recognized in $2020 \ldots \ldots \ldots . . \quad \$ 105,000$
-How much cash was collected in 2020 on this contract?

• A) $ 25,000
• B) $ 170,000
• C) $ 200,000
• D) $ 300,000

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Definitions:

Constituency

The group of individuals or the demographic that is represented or served by a specific leader or organization.

Genuine Tactic

A strategy or maneuver that is sincere and not intended to deceive, used in various contexts such as negotiations or personal interactions.

Bystanders

Individuals who are present at an event or situation but do not take an active role.

Manipulation

The skillful or unfair influence or control over someone or something to gain an advantage.