This year,a contractor agrees to build a building for $2,000,000,which will be completed by the end of next year.The builder's cost is estimated to be $1,700,000.The actual costs this year are $800,000 and next year's actual costs are $800,000.If the tax rate is 20% and the interest rate is 10%,the look back interest for the percentage of completion method is
A)$ 0.
B)$1,176.
C)$2,000.
D)$6,000.

Question

Quizplus · Accepted Answer

A)Because the term of the contract is less than two years,look back interest is not applicable.

This Year,a Contractor Agrees to Build a Building for $2,000,000,which