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:

Earn Money

The act of receiving financial compensation in exchange for goods provided, services rendered, or through employment.

Stimulating Activities

Tasks or engagements that provoke thought, interest, or excitement, contributing to mental or physical growth.

Sexual Harassment

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature.

Trivialized

Made to appear less important, significant, or complex than it actually is.