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 2018, JRE2 would report gross profit (loss) of:
A) $(223,000).
B) $(150,000).
C) $(206,000).
D) $0.

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 2018, JRE2 would report gross profit (loss) of:
A) $(223,000). 
B) $(150,000). 
C) $(206,000). 
D) $0.

Quizplus · Accepted Answer

In 2018: $2,200,000 - ($250,000 + 1,600,000 + 500,000) = $(150,000) loss to recognize.

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