Karr Construction Built a Levee for the State of Mississippi

question 42

Essay

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 in proportion to the costs incurred by Karr, how much net income is reported in 2010?
a. $100,000
b. $200,000
c. $300,000
d. $400,000

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Definitions:

Mental Representations

Internal cognitive symbols, models, or maps of the world, phenomena, or concepts that the mind constructs for understanding and navigating the environment.

Object Permanence

The understanding that objects continue to exist even when they cannot be seen, heard, or otherwise sensed, a critical concept in the cognitive development of infants.

Sensorimotor Substage

A phase within Piaget's sensorimotor stage of development where infants use their senses and motor abilities to understand the world.

Secondary Circular Reactions

A developmental stage in infants from about 4 to 8 months characterized by intentional repetition of actions that produce effects on the environment.