Use the following information for questions 76 and 77.
Gomez, Inc. began work in 2014 on contract #3814, which provided for a contract price of $14,400,000. Other details follow:
-Assume that Gomez uses the percentage-of-completion method of accounting. The portion of the total gross profit to be recognized as income in 2014 is
A) $900,000.
B) $1,200,000.
C) $3,600,000.
D) $4,800,000.

Question

Use the following information for questions 76 and 77.
Gomez, Inc. began work in 2014 on contract #3814, which provided for a contract price of $14,400,000. Other details follow: 
-Assume that Gomez uses the percentage-of-completion method of accounting. The portion of the total gross profit to be recognized as income in 2014 is
A) $900,000. 
B) $1,200,000. 
C) $3,600,000. 
D) $4,800,000.

Quizplus · Accepted Answer

The percentage-of-completion method recognizes revenue based on the progress of the project. The portion of the total gross profit recognized in 2014 would be calculated based on the percentage of the project completed in that year.

Use the Following Information for Questions 76 and 77