Suppose That, in 2010, Indiana Incurred Costs of $63

Suppose that, in 2010, Indiana incurred costs of $63.75 million and estimated an additional $42.75 million in costs to complete the project. Using the percentage-of-completion method, Indiana:

A) Recognized $3.75 million loss on the project in 2010.
B) Recognized $5.25 million gross profit on the project in 2010.
C) Recognized $7.5 million gross profit on the project in 2010.
D) None of these is correct.The project is 70% complete after 2010 (i.e., $99.75 million costs to date/ $142.5 million estimated total costs) .The estimated gross profit is now $7.5 million (i.e., $150 million $142.5 million) , so gross profit to date is $5.25 million.$9 million was recognized in 2009, so a $3.75 million loss is recognized in 2010.