In Year 1 a Contractor Agrees to Build a Building

question 108

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 $1,100,000.Under the percentage of completion method year 2's gross profit is

• A)$150,000.
• B)$500,000.
• C)$700,000.
• D)$350,000.