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

question 100

Multiple Choice

Camey Construction enters into a long-term fixed price contract to build an office building for $6,000,000. In the first year of the contract Camey incurs $1,400,000 of cost and the engineers determined that the remaining costs to complete are $2,200,000. Camey billed $3,800,000 and collected $1,000,000 in Year 1. Refer to Camey Construction. How should Camey report Construction in Progress and Billings on Construction in Progress at the end of year 1 on the balance sheet assuming the use of the percentage-of-completion method? (Do not round intermediary calculations, and round your final answer to the nearest whole dollar.)

• A) asset of $0
• B) liability of $1,466,667
• C) asset of $1,400,000
• D) liability of $3,800,000

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