The January 1, 2006 status of long-term construction project No. 6 follows. Assume the completed contract method. Costs incurred to date = $20,000
Contract price = $80,000
Estimated remaining cost to complete = $40,000
On December 31, 2006, the estimated remaining cost to complete was still $40,000, and $25,000 of cost had been incurred during 2006. What is the January 1, 2007 balance of Construction-in-Process?
A) $30,000
B) $40,000
C) $45,000
D) $50,000

Question

Quizplus · Accepted Answer

Under the completed contract method, the Construction-in-Process account accumulates costs incurred. By January 1, 2007, total costs incurred are $20,000 (2005) + $25,000 (2006) = $45,000.

The January 1, 2006 Status of Long-Term Construction Project No