At December 31, 2015 Cooper would report Construction in Process in the amount of:
A) $690,000
B) $7,590,000
C) $8,280,000
D) $7,080,000

Question

Quizplus · Accepted Answer

The beginning balance of Construction in Process was $3,390,000. During the year, Cooper incurred $7,890,000 in construction costs. Therefore, the ending balance of Construction in Process would be the beginning balance plus the construction costs incurred during the year, which is $3,390,000 + $7,890,000 = $11,280,000.

However, Cooper also recognized $2,000,000 in billings to customers for contracts in progress during the year. This amount is deducted from the ending balance of Construction in Process to arrive at the net amount of construction costs incurred but not yet billed, which is $11,280,000 - $2,000,000 = $9,280,000.

Therefore, the correct answer is C) $8,280,000, which is the net amount of construction costs incurred but not yet billed as of December 31, 2015.

At December 31, 2015 Cooper Would Report Construction in Process