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Delmonte Builders is currently working on a three-year building project for a client. Delmonte recognizes revenues based on the percentage of the work completed by
Delmonte Builders is currently working on a three-year building project for a client. Delmonte recognizes revenues based on the percentage of the work completed by the end of each year. The following table shows the project progress over the three-year period.
| Year | 1 | 2 | 3 |
| Total price of the three-year project | $10,000,000 | $10,000,000 | $10,000,000 |
| Percentage of the work completed | 18% | 75% | 100% |
| Cash received from the client | $3,500,000 | $3,500,000 | $3,000,000 |
REQUIRED: How much revenue should Delmonte recognize in Years 2 and 3? Explain.
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