Robin Construction Company Began a Long-Term Contract in 2012

question 50

Multiple Choice

Robin Construction Company began a long-term contract in 2012.The contract price was $600,000.The estimated cost of the contract at the time it was begun was $450,000.The actual cost incurred in 2012 was $300,000.The contract was completed in 2013 and the cost incurred that year was $180,000.Under the percentage of completion method:

• A)Robin should report $300,000 of income in 2012.
• B)Robin should report a $30,000 loss in 2013.
• C)Robin must pay interest (under the look-back method) on the overpayment of taxes in 2012.
• D)Robin should report $60,000 profit on the contract in 2013.
• E)Robin will receive interest (under the look-back method) on the overpayment of taxes in 2012.

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Definitions:

Highly Cooperative

Describes individuals or groups that work together willingly and effectively towards a common goal.

Assertive

A communication style and behavior characterized by confidence and decisiveness, allowing individuals to express their opinions and needs clearly and respectfully.

Ethical Culture

The values and behaviors within an organization that contribute to its moral atmosphere and ethical decision-making.

Holistic View

A comprehensive perspective that considers all factors, systems, and their interconnections.