Hayes Construction Corporation contracted to construct a building for $4,500,000. Construction began in 2014 and was completed in 2015. Data relating to the contract are summarized below: Hayes uses the percentage-of-completion method as the basis for income recognition. For the years ended December 31, 2014, and 2015, respectively, Hayes should report gross profit of
A) $810,000 and $540,000.
B) $2,700,000 and $1,800,000.
C) $900,000 and $450,000.
D) $0 and $1,350,000.

Question

Hayes Construction Corporation contracted to construct a building for $4,500,000. Construction began in 2014 and was completed in 2015. Data relating to the contract are summarized below:  Hayes uses the percentage-of-completion method as the basis for income recognition. For the years ended December 31, 2014, and 2015, respectively, Hayes should report gross profit of
A) $810,000 and $540,000. 
B) $2,700,000 and $1,800,000. 
C) $900,000 and $450,000. 
D) $0 and $1,350,000.

Quizplus · Accepted Answer

The Answer of Hayes Construction Corporation contracted to construct a building for $4,500,000. Construction began in 2014 and was completed in 2015. Data relating to the contract are summarized below:  Hayes uses the percentage-of-completion method as the basis for income recognition. For the years ended December 31, 2014, and 2015, respectively, Hayes should report gross profit of
A) $810,000 and $540,000. 
B) $2,700,000 and $1,800,000. 
C) $900,000 and $450,000. 
D) $0 and $1,350,000.

Hayes Construction Corporation Contracted to Construct a Building for $4,500,000