Multiple Choice Answers

Indiana Co. began a construction project in 2006 that will provide it $150 million when it is completed in 2008. During 2006, Indiana incurred $36 million of costs and estimates an additional $84 million of costs to complete the project.
Suppose that, in 2007, Indiana incurred costs of $63.75 million and estimated an additional $42.75 million in costs to complete the project. Using the percentage-of-completion method, Indiana: (Points : 1)
Recognized $3.75 million loss on the project in 2007.
Recognized $5.25 million gross profit on the project in 2007.
Recognized $7.5 million gross profit on the project in 2007.
None of the above is correct

The FASB’s stated preference for reporting operating cash flows is the: (Points : 1)
Indirect method.
Direct method.
Working capital method.
All financial resources method.

Indiana Co. began a construction project in 2006 that will provide it $150 million when it is completed in 2008. During 2006, Indiana incurred $36 million of costs and estimates an additional $84 million of costs to complete the project.
In 2007, Indiana incurred costs of $58.5 million and estimated an additional $40.5 million in costs to complete the project. Using the percentage-of-completion method, Indiana: (Points : 1)
Recognized $15 million gross profit on the project in 2007.
Recognized $13.5 million gross profit on the project in 2007.
Recognized $6 million gross profit on the project in 2007.
Recognized $1.5 million gross profit on the project in 2007.