Steinman Construction Company uses the percentage-of-completion method for long-term construction contracts.The company has a project with a contract price of $7,000 on which $600 of gross profit has been recognized in prior years.Information for the current year is as follows: What is the loss that Steinman should recognize in the current year?
A) $600
B) $800
C) $1,400
D) No loss should be recognized.

Question

Steinman Construction Company uses the percentage-of-completion method for long-term construction contracts.The company has a project with a contract price of $7,000 on which $600 of gross profit has been recognized in prior years.Information for the current year is as follows:  What is the loss that Steinman should recognize in the current year?
A) $600 
B) $800 
C) $1,400 
D) No loss should be recognized.

Quizplus · Accepted Answer

The Answer of Steinman Construction Company uses the percentage-of-completion method for long-term construction contracts.The company has a project with a contract price of $7,000 on which $600 of gross profit has been recognized in prior years.Information for the current year is as follows:  What is the loss that Steinman should recognize in the current year?
A) $600 
B) $800 
C) $1,400 
D) No loss should be recognized.

Steinman Construction Company Uses the Percentage-Of-Completion Method for Long-Term Construction