Brown Construction Company uses the percentage-of-completion method for long-term construction contracts. A specific job was begun in 2011 and completed in 2013. The contract price was $1,400,000 and cost information as of each year-end is given below:

Assuming Brown correctly recorded gross profit in 2011, how much gross profit should the company record in 2012?
A) $0
B) $20,000
C) $300,000
D) $320,000

Question

Brown Construction Company uses the percentage-of-completion method for long-term construction contracts. A specific job was begun in 2011 and completed in 2013. The contract price was $1,400,000 and cost information as of each year-end is given below:

Assuming Brown correctly recorded gross profit in 2011, how much gross profit should the company record in 2012?

Assuming Brown correctly recorded gross profit in 2011, how much gross profit should the company record in 2012?
A) $0 
B) $20,000 
C) $300,000 
D) $320,000

Quizplus · Accepted Answer

The Answer of Brown Construction Company uses the percentage-of-completion method for long-term construction contracts. A specific job was begun in 2011 and completed in 2013. The contract price was $1,400,000 and cost information as of each year-end is given below:

Assuming Brown correctly recorded gross profit in 2011, how much gross profit should the company record in 2012?
A) $0 
B) $20,000 
C) $300,000 
D) $320,000

Brown Construction Company Uses the Percentage-Of-Completion Method for Long-Term Construction