In 2008, Crane Corporation began construction work under a three-year contract. The contract price is $2,400,000. Crane uses the percentage-of- completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of costs incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2008, follow:

-What was the initial estimated total income before tax on this contract?
A) $300,000
B) $320,000
C) $400,000
D) $480,000

Question

In 2008, Crane Corporation began construction work under a three-year contract. The contract price is $2,400,000. Crane uses the percentage-of- completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of costs incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2008, follow:
 
-What was the initial estimated total income before tax on this contract?
A) $300,000 
B) $320,000 
C) $400,000 
D) $480,000

Quizplus · Accepted Answer

11ee9a5f_703c_fe5c_b9cb_0ffc87f1e75b_TB10226_00

In 2008, Crane Corporation Began Construction Work Under a Three-Year