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

question 58

Multiple Choice

Gleason Construction enters into a long-term fixed price contract to build an office building for $26,000,000. In the first year of the contract, Gleason incurs $6,000,000 of cost and the engineers determined that the remaining costs to complete are $14,000,000. How much revenue should Gleason recognize in Year 1 assuming the use of the zero-gross -profit approach?

• A) $6,000,000
• B) $26,000,000
• C) $0
• D) $14,000,000

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Definitions:

Comparative Reasoning

The process of evaluating the similarities and differences between two or more entities to draw a conclusion or make a decision.

Comparative Inference

The process of drawing conclusions based on the comparison of different data sets, cases, or instances.

Comprehensiveness

The quality or state of being complete and including all or nearly all elements or aspects of something.

Comparative Reasoning

A method of reasoning that involves comparing similarities and differences among entities or scenarios to draw conclusions.