Use the Following Information for Questions 73 and 74

question 67

Multiple Choice

Use the following information for questions 73 and 74.
In 2015, Fargo Corporation began construction work under a three-year contract. The contract price is $4,800,000. Fargo uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of costs incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2015, follow:
-How much cash was collected in 2015 on this contract?

• A) $200,000
• B) $280,000
• C) $40,000
• D) $480,000

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Definitions:

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Given or provided, often in response to a request or in acknowledgment of a need.

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Conforming to a standard; usual, typical, or expected under specific conditions or circumstances.

High-context

A communication style where much of the information is understood through context, non-verbal cues, and between-the-lines reading, rather than stated explicit content.

Inferred

Concluded or derived as a judgment based on evidence or reasoning rather than being stated explicitly.