JRE2 Inc. entered into a contract to install a pipeline for a fixed price of $2,200,000. JRE2 recognizes revenue upon contract completion.
-In 2017, JRE2 would report (rounded to the nearest thousand) gross profit (loss) of:
A) $0.
B) $(100,000).
C) $56,000.
D) $73,000.

Question

JRE2 Inc. entered into a contract to install a pipeline for a fixed price of $2,200,000. JRE2 recognizes revenue upon contract completion.  
-In 2017, JRE2 would report (rounded to the nearest thousand) gross profit (loss) of:
A) $0. 
B) $(100,000). 
C) $56,000. 
D) $73,000.

Quizplus · Accepted Answer

Total estimated gross profit ($2,200,000 - 250,000 - 1,550,000 = $400,000), so don't need to recognize any contract loss.

JRE2 Inc Entered into a Contract to Install a Pipeline for for a Fixed