Exhibit 18-2 the Following Information Relates to a Project of the Sarasota

question 24

Multiple Choice

Exhibit 18-2 The following information relates to a project of the Sarasota Construction Company:
$\begin{array}{llll}&2010&2011&2012\\\text { Construction costs incurred } & \$ 136,000 & \$ 546,500 & \$ 200,000 \\\text { Estimated costs to complete } & 714,000 & 227,500 & --\end{array}$
The contract price was $1, 000, 000.Sarasota used the percentage-of-completion method of revenue recognition.
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Refer to Exhibit 18-2.What amount of gross profit was recognized in 2010?

• A)$150, 000
• B)$ 28, 571
• C)$ 24, 000
• D)$ 20, 400

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Definitions:

Self-Serving Bias

A common cognitive bias that causes individuals to see things in a way that favors themselves, often by attributing successes to personal skill and failures to external factors.

Probability

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1.

Control

In experiments, the standard to which comparisons are made by keeping all variables constant except the one being tested.

Biased

Showing an unfair preference or prejudice for or against something or someone.