During 2014, Gates Corp

question 7

Multiple Choice

During 2014, Gates Corp. started a construction job with a total contract price of $14,000,000. The job was completed on December 15, 2015. Additional data are as follows: Under the completed-contract method, what amount should Gates recognize as gross profit for 2015?

• A) $900,000
• B) $1,250,000
• C) $1,900,000
• D) $2,500,000

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Definitions:

Decision Lag

The delay between recognizing the need for a decision and the actual implementation of that decision, often affecting the efficiency of response in economic policy.

Impact Lag

The time it takes for the full effects of a monetary or fiscal policy to impact the economy after it has been implemented.

Borrow

The act of getting something from someone with the intention of returning it or its equivalent.

Reserves

Funds or assets set aside by individuals, institutions, or governments to meet future liabilities, emergencies, or regulatory requirements.