Use the Following Information for the Following Questions:
Hemsworth Ltd

question 51

Multiple Choice

Use the following information for the following questions:
Hemsworth Ltd. began work in 2020 on a contract for $ 960,000. Other details follow:
$\quad \quad\quad \quad\quad \quad\quad \quad\quad \quad\quad \quad\quad \quad\quad \quad\quad \quad\quad \quad\quad \quad\quad \quad\quad \quad\quad \quad\quad\quad \underline{2020}\quad \quad\quad \quad\underline{2021}$
$\text{Costs incurred during the year}\ldots \ldots \ldots \ldots \ldots \ldots \ldots\ldots \ldots \ldots \ldots \ldots \ldots \ldots\$160,000\quad \quad\$490,000$
$\text{Estimated costs to complete as of December 31}\ldots \ldots \ldots \ldots \ldots \ldots \ldots\ldots \ldots480,000\quad \quad0$
$\text{Billings during the year }\ldots\ldots \ldots \ldots \ldots\ldots\ldots \ldots \ldots \ldots\ldots \ldots \ldots \ldots \ldots \ldots \ldots 180,000\quad \quad720,000$
$\text{Collections during the year}\ldots\ldots \ldots \ldots \ldots\ldots\ldots \ldots \ldots \ldots\ldots \ldots \ldots \ldots \ldots \ldots 150,000\quad \quad975,000$
-Assume that Hemsworth uses the percentage-of-completion method of accounting. The portion of the total gross profit to be recognized in 2020 is

• A) $ 60,000.
• B) $ 80,000.
• C) $ 240,000.
• D) $ 320,000.

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