Heineken Co. began a construction project in 2019 at a total contract price of $150 million. The project is scheduled for completion by 2021. During 2019, Heineken incurred $36 million of costs and estimates an additional $84 million of costs to complete the project. In 2020, Heineken incurred costs of $58.5 million and estimated an additional $40.5 million in costs to complete the project. Heineken recognizes revenue on all contracts over time, as the project is being completed by using the cost to cost approach. _____

12. In their 2019 income statement, Heineken would:

A) Recognized no gross profit or loss on the project.

B) Recognized a $6 million loss on the project.

C) Recognized $9 million gross profit on the project.

D) Recognized $36 million loss on the project. _____

13. In their 2020 income statement, Heineken would:

A) Recognized $15 million gross profit on the project.

B) Recognized $13.5 million gross profit on the project.

C) Recognized $6 million gross profit on the project.

D) Recognized $1.5 million gross profit on the project. _____

14. Assume that Heineken incurred costs of $63.75 million in 2020 and estimated it would cost an additional $42.75 million to complete the project. In their 2020 income statement, Heineken would:

A) Recognize a $3.75 million loss on the project.

B) Recognize a $5.25 million gross profit on the project.

C) Recognize a $7.5 million gross profit on the project.

D) Recognize no gross profit or loss on the project.