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:

Public Company Accounting Oversight Board

A nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and the public interest by promoting informative, accurate, and independent audit reports.

SEC Oversight

Regulatory oversight exercised by the Securities and Exchange Commission, aiming to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

Short-Swing Profits

Profits made from the sale of company stock within any six-month period by a statutory insider.

Statutory Insider

An individual or entity that possesses confidential information about a company due to their position or relationship to it, as defined by law.