Reese Construction Corporation contracted to construct a building for $1,500,000. Construction began in 2008 and was completed in 2009. Data relating to the contract are summarized below:

Reese uses the percentage-of-completion method as the basis for income recognition. For the years ended December 31, 2008, and 2009, respectively, Reese should report gross profit of
A) $270,000 and $180,000.
B) $900,000 and $600,000.
C) $300,000 and $150,000.
D) $0 and $450,000.

Question

Reese Construction Corporation contracted to construct a building for $1,500,000. Construction began in 2008 and was completed in 2009. Data relating to the contract are summarized below:

Reese uses the percentage-of-completion method as the basis for income recognition. For the years ended December 31, 2008, and 2009, respectively, Reese should report gross profit of
A) $270,000 and $180,000. 
B) $900,000 and $600,000. 
C) $300,000 and $150,000. 
D) $0 and $450,000.

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11ee9a5f_703c_b038_b9cb_e9029c8fae23_TB10226_00

Reese Construction Corporation Contracted to Construct a Building for $1,500,000