Playtime Corporation
Assume that Playtime Corp.has agreed to construct a new playground for Surrey County for $2,450,000.Construction of the new playground will begin on March 17,2012 and is expected to be completed in August 2013.At the signing of the contract Playtime Corp.estimates that it will cost $1,750,000 to build the playground.
-At the end of 2012 Playtime provided the following information about the project: If Playtime uses the percentage of to recognize revenue on the long-term contract,how much gross margin should Playtime recognize in 2012?
A) $389,200
B) $278,000
C) $556,000
D) $433,550

Question

Playtime Corporation
Assume that Playtime Corp.has agreed to construct a new playground for Surrey County for $2,450,000.Construction of the new playground will begin on March 17,2012 and is expected to be completed in August 2013.At the signing of the contract Playtime Corp.estimates that it will cost $1,750,000 to build the playground.
-At the end of 2012 Playtime provided the following information about the project:  If Playtime uses the percentage of to recognize revenue on the long-term contract,how much gross margin should Playtime recognize in 2012?
A) $389,200 
B) $278,000 
C) $556,000 
D) $433,550

Quizplus · Accepted Answer

1,200,000/1,800,000 = 66.7%*($2,450,000-$1,800,000)= $433,550

Playtime Corporation Assume That Playtime Corp.has Agreed to Construct a New Playground