Beaver Dam Builders Inc.(BDBI) has collected the following information about a dam it is building: costs to date $300,000, estimated total costs $1,200,000, estimated total revenues $1,600,000.If BDBI has collected $200,000 to date uses the cost-recovery method to recognize revenue, how much revenue related to the project have they recognized to date?

Question

Quizplus · Accepted Answer

The cost-recovery method recognizes revenue only to the extent that costs have been incurred. To date, BDBI has incurred $300,000 in costs and collected $200,000. Therefore, they have recognized $200,000 in revenue to date.