Southview Construction Company Enters into a Contract to Build a 30

question 102

Multiple Choice

Southview Construction Company enters into a contract to build a 30 mile cross country ski trail for $36,000 in the current year. Southview estimates the cost of building the trail to be $12,000. During the first year, Southview completes 10 miles of trail at a cost of $5,000. Southview receives $13,000 in advanced payments on the contract price in the first year. How much gross income must Southview recognize from the construction project in the first year?

• A)$- 0 -
• B)$5,000
• C)$12,000
• D)$13,000
• E)$15,000

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Definitions:

Average Rate

An arithmetic mean that represents the change in a variable over a specific period of time.

Z-Test Statistic

A statistical measure used in hypothesis testing, which indicates how many standard deviations an element is from the mean.

Interpret

To explain the meaning of information or data, often by drawing inferences or conclusions.

Financial Planning

The process of creating strategies for managing a person's or organization's financial affairs to meet life goals.