Punk Construction Corp.has consistently used the percentage-of-completion method.In 2017, Punk started work on a $7,000,000 construction contract that was completed in 2018.The following information was taken from Cymbal's 2017 accounting records: Under the earnings approach, what amount of gross profit should Cymbal recognize in 2017 on this contract?
A)$700,000
B)$466,667
C)$350,000
D)$233,333

Question

Punk Construction Corp.has consistently used the percentage-of-completion method.In 2017, Punk started work on a $7,000,000 construction contract that was completed in 2018.The following information was taken from Cymbal's 2017 accounting records:  Under the earnings approach, what amount of gross profit should Cymbal recognize in 2017 on this contract?
A)$700,000 
B)$466,667 
C)$350,000 
D)$233,333

Quizplus · Accepted Answer

The Answer of Punk Construction Corp.has consistently used the percentage-of-completion method.In 2017, Punk started work on a $7,000,000 construction contract that was completed in 2018.The following information was taken from Cymbal's 2017 accounting records:  Under the earnings approach, what amount of gross profit should Cymbal recognize in 2017 on this contract?
A)$700,000 
B)$466,667 
C)$350,000 
D)$233,333