Karr Construction Built a Levee for the State of Mississippi

question 46

Multiple Choice

Karr Construction built a levee for the state of Mississippi over a three-year period. The contracted price for the levee was $1,200,000. The costs incurred by Karr and the payments from the state over the three year period are as follows: If revenue is recognized when payments are received, which of the following present the net income amounts reported in 2009, 2010, and 2011, respectively?

• A) $600,000; $400,000; $500,000
• B) $300,000; $200,000; $400,000
• C) $400,000; $400,000; $400,000
• D) $300,000; $200,000; $100,000

---

Definitions:

Collateral

An asset offered to secure a loan or obligation, which can be seized by the lender if the borrower fails to repay.

Secured Transaction

A transaction in which the payment of a debt is guaranteed by personal property the debtor owns.

Debt

An obligation, typically financial, owed by one party (the debtor) to another (the creditor), which might include money, services, or other forms of recompense.

Personal Property

Assets or belongings that are not fixed to one location and can be moved, such as furniture, electronics, or vehicles.