Use the following information for questions 78 and 79.
Kiner, Inc. began work in 2014 on a contract for $16,800,000. Other data are as follows:
-If Kiner uses the percentage-of-completion method, the gross profit to be recognized in 2014 is
A) $2,880,000.
B) $3,200,000.
C) $4,320,000.
D) $4,800,000.

Question

Use the following information for questions 78 and 79.
Kiner, Inc. began work in 2014 on a contract for $16,800,000. Other data are as follows: 
-If Kiner uses the percentage-of-completion method, the gross profit to be recognized in 2014 is
A) $2,880,000. 
B) $3,200,000. 
C) $4,320,000. 
D) $4,800,000.

Quizplus · Accepted Answer

The percentage-of-completion method recognizes revenue and profits on long-term contracts in proportion to the completion stage of the project. To calculate the gross profit to be recognized in 2014, we need to determine the percentage of the project completed in that year and apply it to the total expected gross profit. Without the specific numbers provided in the question, the correct answer cannot be directly calculated here. However, based on the options given, if A) $2,880,000 is the correct choice, it implies that this amount represents the portion of the total expected gross profit recognized in 2014 based on the project's progress during that year.

Use the Following Information for Questions 78 and 79