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Karr Construction Built a Levee for the State of Mississippi

Question 62

Multiple Choice

Karr Construction built a levee for the state of Mississippi over a three-year period. The contracted price for the levee was $3,000,000. The costs incurred by Karr and the payments from the state over the three year period are as follows:
201720182019 Total  Costs incurred by  Karr $600,000$800,000$200,000$1,600,000 Payments from  Mississippi $1,200,000$800,000$1,000,000$3,000,000\begin{array}{|l|c|c|c|r|}\hline & \mathbf{2 0 1 7} & \mathbf{2 0 1 8} & \mathbf{2 0 1 9} & \text { Total } \\\hline \begin{array}{l}\text { Costs incurred by } \\\text { Karr }\end{array} & \$ 600,000 & \$ 800,000 & \$ 200,000 & \$ 1,600,000 \\\hline \begin{array}{l}\text { Payments from } \\\text { Mississippi }\end{array} & \$ 1,200,000 & \$ 800,000 & \$ 1,000,000 & \$ 3,000,000 \\\hline\end{array}
If revenue is recognized when payments are received, which of the following present the net income amounts reported in 2017, 2018, and 2019, respectively?


A) $1,200,000; $800,000; $1,000,000
B) $600,000; $0; $800,000
C) $800,000; $800,000; $800,000
D) $600,000; $400,000; $200,000

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