Rock Aerospace Company Signed a Contract on April 1, Year $\begin{array}{ll}\text { Year 4 } & \$ 5,600,000 \\\text { Year } 5 & \$ 11,200,000 \\\text { Year 6 } & \$ 5,600,000\end{array}$

question 6

Multiple Choice

Rock Aerospace Company signed a contract on April 1, Year 4, to build a satellite for $28,000,000.Estimated costs for the contract are:
$\begin{array}{ll}\text { Year 4 } & \$ 5,600,000 \\\text { Year } 5 & \$ 11,200,000 \\\text { Year 6 } & \$ 5,600,000\end{array}$
$\text { Assume that actual costs incurred coincide with expectations. Cash collections of the contract price are as follows: }$
$\begin{array}{ll}\text { Year } 4 & \$ 4,200,000 \\\text { Year } 5 & \$ 7,000,000 \\\text { Year 6 } & \$ 16,800,000\end{array}$ Refer to the Rock Aerospace Company example.Income from the contract for Year 5 under the percentage-of-completion method is:

• A)$1,000,000
• B)$1,400,000
• C)$2,800,000
• D)$3,360,000
• E)None of the above

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