Gleason Construction Enters into a Long-Term Fixed Price Contract to Build

question 85

Multiple Choice

Gleason Construction enters into a long-term fixed price contract to build an office building for $20,000,000. In the first year of the contract Gleason incurs $7,000,000 of cost and the engineers determined that the remaining costs to complete are $7,000,000. How much gross profit or loss should Gleason recognize in Year 1 assuming the use of the completed-contract method?

• A) $0
• B) $6,000,000 profit
• C) $6,000,000 loss
• D) $5,000,000 profit

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Definitions:

Louverture

Toussaint Louverture was a leader of the Haitian Revolution, renowned for his military and political acumen that led to the establishment of an autonomous government in Haiti.

Political Parties

Organizations that seek to achieve political power by participating in electoral campaigns, educating the public, and nominating candidates for office based on shared political ideologies and goals.

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The third President of the United States (1801–1809), a Founding Father, and the principal author of the Declaration of Independence.

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A pivotal presidential election in the United States that resulted in Thomas Jefferson defeating incumbent John Adams, noted for its intense political rivalry and the peaceful transition of power.