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1. Green Construction Co. has consistently used the percentage-of-completion method of recognizing revenue. During 2014, Green entered into a fixed-price contract to construct an office building for $24,000,000. Information relating to the contract is as follows:
At December 31
2014 2015
Percentage of completion 15% 45%
Estimated total cost at completion $18,000,000 $19,200,000
Gross profit recognized (cumulative) 1,200,000 2,880,000
Contract costs incurred during 2015 were ??
1. Green Construction Co. has consistently used the percentage-of-completion method of recognizing revenue. During 2014, Green entered into a fixed-price contract to construct an office building for $24,000,000. Information relating to the contract is as follows:
At December 31
2014 2015
Percentage of completion 15% 45%
Estimated total cost at completion $18,000,000 $19,200,000
Gross profit recognized (cumulative) 1,200,000 2,880,000
Contract costs incurred during 2015 were
a. $5,760,000.
b. $5,940,000.
c. $6,300,000.
d. $8,640,000.