Use the Following Information for Questions 76 and 77

question 10

Multiple Choice

Use the following information for questions 76 and 77.
Gomez, Inc. began work in 2014 on contract #3814, which provided for a contract price of $14,400,000. Other details follow:
-Assume that Gomez uses the completed-contract method of accounting. The portion of the total gross profit to be recognized as income in 2015 is

• A) $1,800,000.
• B) $2,700,000.
• C) $4,650,000.
• D) $14,400,000.

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Definitions:

Relaxation of Requirements

The easing or reduction of stringent rules, standards, or conditions, often to accommodate special circumstances.

Material Misrepresentation

A statement that is significantly untrue or misleading and, if known to be such, could have influenced the decision-making of a party in a contract or agreement.

Voidable

A legal term describing a transaction or agreement that is valid but may be annulled by one of the parties involved.

Statute of Limitations

A law which sets out the maximum period one can wait before filing a lawsuit, depending on the type of case or claim.