President of Dewey, Cheatum, andHowe Construction Co., Inc. You are reviewing the financial datafor the first year of the company's operation ended 31December 19X4. Your accounting records show the following status asof 31 December 19X4.
Accountsreceivable $300,000
Accountspayable 100,000
Accrued G&Acosts 20,000
Uncompleted contractcosts 400,000
Uncompleted contractbillings 500,000
You are also aware that thefollowing has occurred during the 19X4 operational year:
Cashcollections $ 1.700,000
Cash paid-jobcosts 1,500,000
Cash paid-G&Acosts 280,000
You compare your billings with theactual value of construction placed (earned value) and realize thatdue to front-end loading on certain projects you have overbilled atotal of $50,000 on the work.
(a) Calculate the net before-tax profit for 19X4using cash basis
(b) Calculate the net before-tax profit for 19X4 usingaccrual (billings) basis.
(c) Calculate the net before-tax profit using thepercentage-of-completion method.
(d) Calculate the net before-tax profit using thecompleted-contract method.