Shepard Construction Company has consistently used the percentage-of- completion method. On January 10, 2011, Shepard began work on a $3,000,000 construction contract. At the inception date, the estimated cost of construction was $2,250,000. The following data relate to the progress of the contract:

How much gross profit should Shepard recognize for the year ended December 31, 2012?
A) $150,000
B) $262,500
C) $300,000
D) $450,000

Question

Shepard Construction Company has consistently used the percentage-of- completion method. On January 10, 2011, Shepard began work on a $3,000,000 construction contract. At the inception date, the estimated cost of construction was $2,250,000. The following data relate to the progress of the contract:

How much gross profit should Shepard recognize for the year ended December 31, 2012?

How much gross profit should Shepard recognize for the year ended December 31, 2012?
A) $150,000 
B) $262,500 
C) $300,000 
D) $450,000

Quizplus · Accepted Answer

The Answer of Shepard Construction Company has consistently used the percentage-of- completion method. On January 10, 2011, Shepard began work on a $3,000,000 construction contract. At the inception date, the estimated cost of construction was $2,250,000. The following data relate to the progress of the contract:

How much gross profit should Shepard recognize for the year ended December 31, 2012?
A) $150,000 
B) $262,500 
C) $300,000 
D) $450,000

Shepard Construction Company Has Consistently Used the Percentage-Of- Completion Method