Pont Bridges Corp

question 6

Multiple Choice

Pont Bridges Corp.had signed a contract to build a new bridge for $5,000,000.Initially their estimated total costs were $4,400,000.During the first year, they realized their costs were going to be greater than originally estimated.They now expect total costs to be $5,500,000, but they cannot change the contract price.If Pont uses the cost-recovery method to recognize revenue, how much gross profit (loss) related to the project should they recognize in the first year?

• A)($500,000)
• B)($400,000)
• C)$0
• D)$600,000

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Definitions:

Trial Court

The first court where a legal case is tried, before any appeals to higher courts.

Court System

The organizational framework for the administration of justice, comprising various courts with different levels of authority.

Jurisdiction

The legal authority granted to a court to hear and decide cases, determined by factors such as geographic area and case type.

Original

Pertaining to the first or earliest form of something, or being an authentic creation not derived from anything else.