Use the Following Information for the Following Questions:
Folk Construction

question 66

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 income statement for 2020 related to Contract 1?

• A) gross profit, $ 180,000
• B) gross profit, $ 240,000
• C) gross profit, $ 400,000
• D) gross profit, $ 420,000

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Definitions:

Reluctant

Feeling or showing hesitation or unwillingness to do something.

Advocacy

The act of supporting a cause or proposal; the work of advocating for something.

Conservative

A political and social philosophy promoting traditional values and institutions.

Planned Change

A deliberate process designed to improve or alter a situation, system, or organization through structured steps and strategies.