Gleason Construction Enters into a Long-Term Fixed Price Contract to Build

question 32

Multiple Choice

Gleason Construction enters into a long-term fixed price contract to build an office building for $20,000,000.In the first year of the contract Camey incurs $6,000,000 of cost and the engineers determined that the remaining costs to complete are $10,000,000.How much gross profit or loss should Gleason recognize in Year 1 assuming the use of the completed-contract method?

• A)$0
• B)$4,000,000 profit
• C)$4,000,000 loss
• D)$375,000 profit

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Definitions:

Online Consumers

Individuals or entities that purchase goods or services via the internet.

Workday Shopping

The activity of purchasing goods or services during the working hours of a typical business day.

Showrooming

The practice of examining merchandise in a traditional brick-and-mortar retail store without purchasing it, then shopping online to find a lower price for the same item.

Online Promotions

Marketing activities conducted via the internet, including social media advertising, email marketing, and search engine marketing, aimed at increasing brand visibility and sales.