4. (TCO A) Revenue is NOT recognized at the time of sale when (Points : 5)

the buyer obtains legal title the sales is the critical event goods have been exchanged for payment on credit card All of these are reasons to recognize revenue at the time of sale.

Question 5. 5. (TCO A) Windsor Construction Company uses the percentage-of-completion method of accounting. In 2014, Windsor began work on a contract it had received which provided for a contract price of $15,000,000. Other details follow for 2014:

Costs incurred during the year $7,200,000

Estimated costs to complete as of December 31 2014, $4,800,000

Billings during the year $6,600,000

Collections during the year $3,900,000

What should be the gross profit recognized in 2014? (Points : 5)

$600,000 $7,800,000 $1,800,000 $3,000,000