Question
Big MAC Contractors began work on a contract to build a new student union on the St. Maximo University campus for $910,000. Information concerning the
Big MAC Contractors began work on a contract to build a new student union on the St. Maximo University campus for $910,000. Information concerning the project follows:
| Year 1 | Year 2 | Year 3 |
Percentage of work completed | 25% | 35% | 40% |
Costs incurred during the year | $172,000 | $248,000 | $180,000 |
Progress billings during the year | 160,000 | 360,000 | 380,000 |
Cash collected during the year | 130,000 | 340,000 | 430,000 |
How much revenue should Big MAC recognize during Year 1 if it uses the percentage of completion method?
Group of answer choices
$227,500
$900,000
$ 77,500
$160,000
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