Lear Constructors, Ltd.has consistently used the percentage-of-completion method of recognizing income.In 2010, Lear started work on a $7,000,000 construction contract that was completed in 2011.The following information was taken from Lear's 2010 accounting records: Under the earnings approach, what amount of gross profit should Lear have recognized in 2010 on this contract?
A)$700,000.
B)$466,667.
C)$350,000.
D)$233,333.

Question

Lear Constructors, Ltd.has consistently used the percentage-of-completion method of recognizing income.In 2010, Lear started work on a $7,000,000 construction contract that was completed in 2011.The following information was taken from Lear's 2010 accounting records:  Under the earnings approach, what amount of gross profit should Lear have recognized in 2010 on this contract?
A)$700,000. 
B)$466,667. 
C)$350,000. 
D)$233,333.

Quizplus · Accepted Answer

The Answer of Lear Constructors, Ltd.has consistently used the percentage-of-completion method of recognizing income.In 2010, Lear started work on a $7,000,000 construction contract that was completed in 2011.The following information was taken from Lear's 2010 accounting records:  Under the earnings approach, what amount of gross profit should Lear have recognized in 2010 on this contract?
A)$700,000. 
B)$466,667. 
C)$350,000. 
D)$233,333.