Hello could you please demontrate these questions I dont k

Hello , could you please demontrate these questions .

I dont know why dont we subtract 24,090,000 ( 16.5 Milion + 7.59 Milion ) from 18,000,000 ?

The following information relates to questions 104 and 105.

Cooper Construction Company had a contract starting April 2015, to construct a $18,000,000 building that is expected to be completed in September 2017, at an estimated cost of $16,500,000. At the end of 2015, the costs to date were $7,590,000 and the estimated total costs to complete had not changed. The progress billings during 2015 were $3,600,000 and the cash collected during 2015 was 2,400,000.

*104.    For the year ended December 31, 2015, Cooper would recognize gross profit on the building of:

a.   $632,500

b.   $690,000

c.   $810,000

d.   $0

104.          b          ($18,000,000 – $16,500,000) ´ ($7,590,000 ÷ $16,500,000) = $690,000.

*105.    At December 31, 2015 Cooper would report Construction in Process in the amount of:

a.   $690,000

b.   $7,590,000

c.   $8,280,000

d.   $7,080,000

*105.        c          $7,590,000 + $690,000 = $8,280,000.

Solution

Explanation:

Here Cooper Construction Company uses the percentage-of-completion method

104. b. 690000

(46% Complete; Gross profit of 1.5 m x 46% = 690,000)

105. C. 8280000

(Cost to date 7590000 + Gross Profit 690000)