The Leto Construction Company began work on a $15,000 contract on 1/1/22. Planned completion was in2024. The Percentage-of Completion method is used.Given the following at 12/31/22:Costs incurred to dateEstimated costs to completeBillings to dateCollections to dateDecember 31, 2022$2,5009,5004,0003,800The balance sheet location and the net amount of the 12/31/22 Combined CIP and Billings accounts are:Select one:O a. Current Liability of $1,500O b. Current Liability of $200c. Current Asset of $1,500d. Current Liability of $875

Cost incurred to date 2,500 Estimate cost to complete 9,500 Total cost 12,000 %…

Answered: d. Current Liability of $875

Business

Accounting

d. Current Liability of $875

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The Leto Construction Company began work on a $15,000 contract on 1/1/22. Planned completion was in
2024. The Percentage-of Completion method is used.
Given the following at 12/31/22:
Costs incurred to date
Estimated costs to complete
Billings to date
Collections to date
December 31, 2022
$2,500
9,500
4,000
3,800
The balance sheet location and the net amount of the 12/31/22 Combined CIP and Billings accounts are:
Select one:
O a. Current Liability of $1,500
O b. Current Liability of $200
c. Current Asset of $1,500
d. Current Liability of $875

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