In Year 1 a Contractor Agrees to Build a Building

question 41

Multiple Choice

In year 1 a contractor agrees to build a building for $2,500,000 by the end of year 2.The builder's cost is estimated to be $1,800,000.The actual costs year 1 are $900,000 and year 2's actual costs are $1,300,000.Under the completed contract method,the gross profit for year 1 is

• A)$0.
• B)$300,000.
• C)$350,000.
• D)$700,000.

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Definitions:

Duty Not to Compete

A legal agreement where one party agrees not to enter into or start a similar profession or trade in competition against another party.

Restrictive Covenants

Clauses in contracts or agreements that limit certain actions of the parties involved, often to protect business interests.

Public Interest

A common concern among citizens in the management and affairs of local, state, and national government that serves the community well-being as opposed to the benefit of individuals.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another party, often found in relationships involving trust, such as between a trustee and beneficiary.