Algae Builds Large Ships and Uses the Percentage of Completion

question 15

Multiple Choice

Algae builds large ships and uses the percentage of completion method of revenue recognition. The following information pertains to the construction contracts it had in place as of its December 31, 2021 year-end. $$\begin{array} { | l | r | r | } \hline & 2020 & 2021 \\\hline \text { Cost incurred to date } & 200 \text { million } & 400 \text { million } \\\hline \text { Costs to complete contracts } & 600 \text { million } & 600 \text { million } \\\hline \text { Total price of contracts outstanding at } & & \\\text { December } 31,2021 & 1,300 \text { million } & 1,300 \text { million } \\\hline\end{array}$$ How much revenue will Algae recognize in 2020?

• A)$260 million
• B)$325 million
• C)$433 million
• D)$1,300 million

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