Use the information below to answer the following questions:
Multi-Storey Builders Ltd had a large 3-year project with total revenue of $8 000 000 and estimated total costs of $6 500 000. The project was 20% complete at the end of the first year, 70% complete at the end of the second year, and 100% complete at the end of the third year. Revenues and costs were as estimated.
-What profit was earned during the second year if the completed contract method was used?
A) $300 000
B) $750 000
C) $1 050 000
D) $0.

Question

Quizplus · Accepted Answer

Under the completed contract method, revenue and profit are recognized only when the contract is completed. Therefore, no profit is recognized in the second year.

Use the Information Below to Answer the Following Questions