Upton Company Has Consistently Used the Percentage-Of-Completion Method of Recognizing

question 33

Multiple Choice

Upton Company has consistently used the percentage-of-completion method of recognizing income.In 2010,Upton started on an $18,000,000 construction contract that was completed in 2012.The following information was taken from Upton's 2010 accounting records: What amount of revenue should Upton recognize on the contract in 2010?

• A) $6,000,000
• B) $5,400,000
• C) $9,000,000
• D) $0

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Definitions:

Marginal Efficiency

The additional benefit received from consuming or producing one more unit of a good or service.

Capital

Refers to any financial asset, including cash, equipment, and buildings, used in production of goods or services.

Investment Project

A project undertaken by a company or an individual in expectation of generating future financial returns.

Bankrupt

A legal status for individuals or entities that cannot repay the debts they owe to creditors.