On 1 January 2015, Romulus Ltd signed a contract worth $21 000 000 to construct a light rail from A to B. The light rail was to be built over three years, with progress payments of $7 000 000 to be made at the end of each year. Estimated costs were $15 000 000 and the following costs incurred and paid by Romulus Ltd were in accordance with estimates and represented the percentage completed in each year:

The project was completed in December 2017. Using the percentage of completion method, what profit would Romulus Ltd report in 2015?
A) $800 000
B) $2 000 000
C) $3 200 000
D) $1 300 000

Question

On 1 January 2015, Romulus Ltd signed a contract worth $21 000 000 to construct a light rail from A to B. The light rail was to be built over three years, with progress payments of $7 000 000 to be made at the end of each year. Estimated costs were $15 000 000 and the following costs incurred and paid by Romulus Ltd were in accordance with estimates and represented the percentage completed in each year:

The project was completed in December 2017. Using the percentage of completion method, what profit would Romulus Ltd report in 2015?

The project was completed in December 2017. Using the percentage of completion method, what profit would Romulus Ltd report in 2015?
A) $800 000 
B) $2 000 000 
C) $3 200 000 
D) $1 300 000

Quizplus · Accepted Answer

The Answer is C

On 1 January 2015, Romulus Ltd Signed a Contract Worth