Heineken Co. began a construction project in 2014 at a total contract price of \$150

million.?The project is scheduled for completion by 2016. ?During 2014, Heineken incurred \$36 million of costs and estimates an additional \$84 million of costs to complete the project.?In 2015, Heineken incurred costs of \$58.5 million and estimated an additional \$40.5 million in costs to complete the project. Heineken uses the percentage-of-completion method to account for its projects.

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_____12.???????In their 2014 income statement, Heineken would:

A)????????Recognized no gross profit or loss on the project.

B)????????Recognized a \$6 million loss on the project.

C)????????Recognized \$9 million gross profit on the project.

D)????????Recognized \$36 million loss on the project.

_____ 13.?????????In their 2015 income statement, Heineken would:

A)????????Recognized \$15 million gross profit on the project.

B)????????Recognized \$13.5 million gross profit on the project.

C)????????Recognized \$6 million gross profit on the project.

D)????????Recognized \$1.5 million gross profit on the project.

_____ 14.?????????Assume that Heineken incurred costs of \$63.75 million in 2015 and estimated it would cost an additional \$42.75 million to complete the project. ?In their 2015 income statement, Heineken would:

A)????????Recognize a \$3.75 million loss on the project.

B)????????Recognize a \$5.25 million gross profit on the project.

C)????????Recognize a \$7.5 million gross profit on the project.

D)????????Recognize no gross profit or loss on the project.

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This question was answered on: Apr 19, 2020

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