RST Corporation is a large construction company with annual gross receipts, averaging $20 million annually.Last year, the corporation signed an agreement to construct a road for $720,000.Total estimated costs are $600,000.Last year, the corporation actually incurred costs of $240,000.This year, the corporation completed the contract and incurred costs of $300,000.For the current year, RST's gross profit on the contract will be

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The total contract price is $720,000, and the total estimated costs are $600,000, resulting in an estimated gross profit of $120,000. Last year, $240,000 of costs were incurred, and this year $300,000 were incurred, totaling $540,000. The gross profit for the current year is the total contract price minus the total costs incurred, which is $720,000 - $540,000 = $180,000. However, since $60,000 of the profit was recognized last year (based on the percentage of completion method), the current year's gross profit is $180,000 - $60,000 = $120,000. But since the question asks for the gross profit on the contract for the current year, the correct calculation should be based on the remaining profit to be recognized, which is $132,000.

RST Corporation Is a Large Construction Company with Annual Gross