We Build It Corp. (WBIC) is a general contractor that specializes in constructing apartment buildings. WBIC is a publicly accountable enterprise and…

We Build It Corp. (WBIC) is a general contractor that specializes in constructing apartment buildings. WBIC is a publicly accountable enterprise and its year end is December 31. During 20X4, WBIC contracted with Apartment Rentals Inc. (ARI) to construct a single apartment building at a fixed price of $20 million. WBIC determined that this contract represents a single performance obligation satisfied over time. The company only prepares adjusting entries and accruals at year end. Other pertinent information follows: ($’000s) 20X4 20X5* 20X6** 20X7*** Cumulative costs incurred 4,000 11,000 17,000 20,200 Estimated costs to complete 14,000 6,500 4,000 0 Progress billings during the year 5,200 7,400 6,000 1,400 Collections during the year 4,900 7,600 5,400 2,100 * The revised cost data was not known in 20X4. ** The revised cost data was not known in 20X4 or 20X5. *** The revised cost data was not known in 20X4, 20X5 or 20X6. Assume that WBIC uses the cost-to-cost method to estimate its progress to completion. What was the total cost of sales expense (in ‘000s) recognized by WBIC in 20X6?

a) $6,000 b) $6,200 c) $7,000 d) $17,000

"Our Prices Start at $11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!":

Get started