Gomez, Inc. began work in 2010 on contract #3814, which provided for a contract price...
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Gomez, Inc. began work in 2010 on contract #3814, which provided for a contract price of $7,200,000. Other details follow: 2010 2011 Costs incurred during the year $1,200,000 $3,675,000 Estimated costs to complete, as of December 31 3,600,000 0 Billings during the year 1,350,000 5,400,000 Collections during the year 900,000 5,850,000
14. Assume that Gomez uses the percentage-of-completion method of accounting. The portion of the total gross profit to be recognized as income in 2010 is a. $450,000. b. $600,000. c. $1,800,000. d. $2,400,000. 1
5. Assume that Gomez uses the completed-contract method of accounting. The portion of the total gross profit to be recognized as income in 2011 is a. $900,000. b. $1,350,000. c. $2,325,000. d. $7,200,000.
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