Robin Construction Company began a long-term contract in 2017. The contract price was $800,000. The estimated cost of the contract at the time it was begun was $500,000. The actual cost incurred in 2017 was $350,000. The contract was completed in 2018 and the cost incurred that year was $125,000. Under the percentage of completion method:
A)Robin should report $300,000 of income in 2017.
B)Robin should report $90,000 of income in 2018.
C)Robin will receive interest (under the lookback method) on the underpayment of taxes in 2017.
D)Robin should report $325,000 of income in 2017.
E)None of the above is correct.

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The Answer of Robin Construction Company began a long-term contract in 2017. The contract price was $800,000. The estimated cost of the contract at the time it was begun was $500,000. The actual cost incurred in 2017 was $350,000. The contract was completed in 2018 and the cost incurred that year was $125,000. Under the percentage of completion method:
A)Robin should report $300,000 of income in 2017.
B)Robin should report $90,000 of income in 2018.
C)Robin will receive interest (under the lookback method) on the underpayment of taxes in 2017.
D)Robin should report $325,000 of income in 2017.
E)None of the above is correct.

Robin Construction Company Began a Long-Term Contract in 2017