4. In 2016, Omega Construction began work on a contract with a price of $850,000 andestimated costs of $595,000. Data for each year of the contract are as follows:Costs incurred during the year $238,000Estimated costs to completePartial billingsCollections201620172018$319,600$105,000357,000139,400-0-260,000210,000380,000240,000200,000410,000Assuming the performance obligation is satisfied over time, what would be the gross profit in2016?a. $102,000b. $260,000c. $255,000d. $425,000

Introduction:-Gross profit is the profit a company generates after subtracting the expenses of…

Answered: uring the year $238,000 to complete…

Business

Accounting

uring the year $238,000 to complete 357,000 260,000 2016 $319,600 139,400 210,000 2017 $105,000 -0- 380,000 2018

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 26E

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M6-16 Using Percentage-of-Completion and Completed Contract Methods Halsey Building Company signed a contract to build an ofﬁce building for $40,000,000. The scheduled construction costs follow. Year Cost 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,000,000 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,000,000 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,000,000 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $30,000,000 The building is completed in 2018.For each year, compute the revenue, expense, and gross proﬁt reported for this construction project using each of the…