In Year 1 a Contractor Agrees to Build a Building

question 75

Multiple Choice

In year 1 a contractor agrees to build a building for $2,500,000 by the end of year 2.The builder's cost is estimated to be $1,800,000.The actual costs year 1 are $900,000 and year 2's actual costs are $1,300,000.Under the completed contract method the gross profit for year 2 is

• A)$0.
• B)$300,000.
• C)$350,000.
• D)$700,000.

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Definitions:

Consumer Dollar

The purchasing power of a consumer's money, indicating the quantity of goods and services it can buy.

Consumer Market

The consumer market refers to the marketplace where individuals and households buy goods and services for personal use.

Trade Surpluses

A situation where a country exports more than it imports, resulting in a positive balance of trade.

Gross Saving Rate

The proportion of total national income that is not spent on consumption or taxes, indicating the amount saved.