Use the information below to answer the following questions:
The percentage of completion profit for a particular project of Redgate Ltd was $200 000 for year 1 and $220 000 for year 2 (completion).
-What difference would there be in profit for year 2 if the completion of production method were used?
A) Profit would be $200 000 higher.
B) Profit would be $200 000 lower.
C) Profit would be $220 000 higher.
D) Profit would be $420 000 higher.

Question

Quizplus · Accepted Answer

If the completion of production method were used, the entire profit of $200,000 from year 1 would be recognized in year 2, making the profit $200,000 higher in year 2.

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