Refer to Camey Construction.How much gross profit should Camey recognize in Year 1 assuming the use of the percentage-of-completion method?

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Quizplus · Accepted Answer

The percentage-of-completion method recognizes revenue based on the progress towards completion. In Year 1, Camey Construction would recognize a portion of the total contract revenue based on the percentage of costs incurred to total estimated costs. The gross profit recognized would be the recognized revenue minus the costs incurred.