The Total Contract Price to Build an Office Building Is

question 67

Multiple Choice

The total contract price to build an office building is $4 200 000,with estimated costs of $2 800 000.The construction firm's costs for Year 1 were $800 000.Under the percentage of completion method,gross profit reported in Year 1 is:

• A)$2 200 000.
• B)$1 200 000.
• C)$400 000.
• D)none of the above

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Definitions:

IFRS

International Financial Reporting Standards - a set of accounting standards developed by the International Accounting Standards Board that is used globally.

Intangibles

Assets that cannot be touched or physically measured, such as patents, copyrights, and trademarks.

Amortized

The process of gradually writing off the initial cost of an asset over a period, thereby reducing its book value on a company's balance sheet.

Expensed

Expensed items refer to costs that are charged against revenue in the current accounting period instead of being capitalized or recorded as an asset.