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4 January, 06:02

At the beginning of 2019, Florida Road Construction entered into a contract to build a road for the government. Construction will take 4 years. The following information as of 31 December 2009 is available for the contract:

1. Total revenue according to contract $10,000,000

2. Total expected cost $8,000,000

3. Cost incurred during 2009 $1,200,000

Assume that the company estimates percentage complete based on costs incurred as a percentage of total estimated costs. Under the completed contract method, how much revenue will be reported in 2009?

A. None.

B. $300,000.

C. $1,500,000.

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Answers (1)
  1. 4 January, 08:57
    0
    A. None

    Explanation:

    A is correct because Under the completed contract method, no revenue would be reported until the project is completed.
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