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:

-How much cash was collected in 2008 on this contract?
A) $100,000
B) $140,000
C) $20,000
D) $240,000

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:
 
-How much cash was collected in 2008 on this contract?
A) $100,000 
B) $140,000 
C) $20,000 
D) $240,000

Quizplus · Accepted Answer

$240,000 - $100,000 = $140,000.

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