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4. In 2011, KP Building Inc. began work on a four-year construction project (called “Cincy One”). The contract price is $300 million. KP uses the percentage-of-completion method of accounting. At the end of 2011, the following financial statement information indicates the results to date for Cincy One:
INCOME STATEMENT Gross Profit (before-taxes) recognized in 2011 $22 million BALANCE SHEET Accounts Receivable from construction billings $10 million Construction in progress $66 million Less: Billings on construction ($75 million) Net billings in excess of construction in progress $9 million
Required: Compute the following, placing your answer in the spaces provided and showing supporting computations: Items to compute: Cash collected by KP on Cincy One during 2011 Actual costs incurred by KP on Cincy One during 2011 At 12/31/2011, the estimated remaining costs to complete Cincy One The percentage of Cincy One that was completed during 2011
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