Carbon Corporation Had a $2,000,000 Contract to Build a Small

question 64

Multiple Choice

Carbon Corporation had a $2,000,000 contract to build a small hospital with total costs estimated at $1,600,000.It received the following payments and incurred the following expenses over the three-year contract period:
Under the competed contract method of accounting, how much profit (loss) should Carbon recognize in years 1, 2, and 3 respectively?

• A)$0, $0, $250,000
• B)$0, $0, $400,000
• C)$100,000, $300,000, ($150,000)
• D)$75,000, $225,000, ($50,000)

---

Definitions:

Organizational Development

A field of research, theory, and practice dedicated to expanding the knowledge and effectiveness of people to accomplish more successful organizational change and performance.

Organizational Change

The process by which companies or organizations alter their structures, strategies, operational methods, technologies, or organizational culture to effect change within the organization and adapt to new conditions.

Behavioural Science

The study of human and animal behavior through observation and scientific analysis.

Engineering

The application of scientific, mathematical, and practical knowledge to invent, design, build, maintain, and improve structures, machines, devices, systems, materials, and processes.