Robin Construction Company Began a Long-Term Contract in 2014

question 28

Multiple Choice

Robin Construction Company began a long-term contract in 2014.The contract price was $800,000.The estimated cost of the contract at the time it was begun was $500,000.The actual cost incurred in 2014 was $350,000.The contract was completed in 2015 and the cost incurred that year was $125,000.Under the percentage of completion method:

• A)Robin should report $300,000 of income in 2014.
• B)Robin should report $90,000 of income in 2015.
• C)Robin will receive interest (under the lookback method)on the underpayment of taxes in 2014.
• D)Robin should report $325,000 of income in 2014.
• E)None of these is correct.

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Definitions:

Private Employers

Individuals or entities that operate businesses or hire workers in the private sector, as opposed to government entities.

Eligible Employees

Workers who meet certain criteria set by their employers or government regulations, qualifying them for specific benefits or rights.

Family and Medical Leave Act

A U.S. federal law that provides eligible employees with unpaid, job-protected leave for family and medical reasons.

Americans with Disabilities Act

A civil rights law that prohibits discrimination against individuals with disabilities in all areas of public life.