At the End of 20X2 Bob the Builder Had Incurred $\begin{array} { l l } \text { A) Dr. Construction expenses } & \$ 2500000 \end{array}$

question 19

Multiple Choice

At the end of 20X2 Bob the Builder had incurred costs of $2.5 million out of a total cost of construction estimated at $5 million.The fixed contract price is $7.5 million.Using the percentage of completion method provide the journal entries to record these transactions.Progress claims to date total $800 000.

• A)\(\begin{array} { l l } \text { A) Dr. Construction expenses } & \$ 2500000 \end{array}\)
• Dr. Construction in progress \(\quad \$ 1000000\)
• Cr. Construction revenues\(\quad\$ 3500000\)
• B)B) Dr. Construction revenues \( \quad\$ 3500000\)
• \(\begin{array} { l l } \text { Cr. Construction expenses } & \$ 2500000 \\ \text { Cr. Construction in progress } & \$ 1000000 \end{array}\)
• C)\(\begin{array} { l l }
• \text { C) Dr. Cash at bank } & \$ 1000000 \\
• \text { Dr. Construction expenses } & \$ 2500000\\
• \text { Dr. Construction revenue } & \$ 3500000\\
• \end{array}\)
• D)\(\begin{array} { l r l }
• \text { D) Dr. Cash at bank } & \$ 1800000 & \\
• \text { Cr. Construction revenue } & & \$ 1800000
• \end{array}\)

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Definitions:

Exercise Price

The predetermined price at which the holder of an option can buy (call option) or sell (put option) the underlying security or commodity.

Option

An option is a financial derivative that represents a contract sold by one party to another, offering the right, but not the obligation, to buy or sell a security at an agreed-upon price within a certain period of time.

Receive

To obtain or accept something given, presented, or transmitted to you.

Pay

The salary or wage that is given to an employee by an employer in exchange for their work.