Ying Construction Company Entered into a Contract to Build a New

question 1

Multiple Choice

Ying Construction Company entered into a contract to build a new airport terminal for $2,500,000. Construction commenced on August 1, 2020, with a planned completion date of December 31, 2022. A summary of the costs, billings, and collections is provided below: $$\begin{array} { | l | r | r | r | } \hline & \mathbf { 2 0 2 0 } & \mathbf { 2 0 2 1 } & \mathbf { 2 0 2 2 } \\\hline \text { Costs incurred during the year } & 500,000 & 700,000 & 1,100,000 \\\hline \text { Estimated costs to complete at year end } & 1,500,000 & 1,200,000 & 0 \\\hline \text { Billings during the year } & 440,000 & 1,000,000 & 1,060,000 \\\hline \text { Cash collections during the year } & 400,000 & 900,000 & 1,200,000 \\\hline\end{array}$$ Ying uses the percentage of completion method. What amount would appear as accounts receivable on Ying's December 31, 2021 balance sheet?

• A)$100,000
• B)$140,000
• C)$1,000,000
• D)$1,400,000

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Definitions:

Shares

Holdings in a corporation or financial asset, these units confer rights to an equitable distribution of dividends from declared profits.

Quarterly Dividend

A dividend paid by a company to its shareholders every quarter, representing a portion of the company's earnings.

Capital Gains

The profit earned from the sale of an asset or investment which has increased in value over the holding period.

Shares

Units of ownership in a company or financial asset that represent a portion of the total capital.