Playtime Corporation
Assume That Playtime Corp If Playtime Uses the Percentage of Completion to Recognize Revenue

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:
$\begin{array}{lll} & \text { Costsincurred } & \text { Estimated costs } \\\text { Year }&\text { to date } & \text { remaining }\\2012&\$ 1,200.000 & \$ 600.000 \\\end{array}$
If Playtime uses the percentage of completion 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

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free