Question
Green Homes enters into a 3-year contract to build Pink Inc. a new office building for $13,000. Assume the long-term contract qualifies for over a
Green Homes enters into a 3-year contract to build Pink Inc. a new office building for $13,000. Assume the long-term contract qualifies for over a period of time revenue recognition and Green Homes uses the cost-to-cost ratio to measure progress towards completion. Given the following cost data:
| 2021 | 2022 | 2023 | |
| Total Costs to Date | 5,000 | 7,000 | 10,000 |
| Total Expected Costs | 8,000 | 10,000 | 10,000 |
| % Complete | 62.50% | 70.00% | 100.00% |
What is the amount of revenue recognized in 2022?
| a. | None of the options | |
| b. | $ 8,125 | |
| c. | $ 9,100 | |
| d. | $ 3,900 | |
| e. | $ 975 |
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Cost Accounting Principles And Applications
Authors: Horace R. Brock, Linda Herrington
6th Edition
0028034287, 978-0028034287
