Question
On April 1, 2015, Pine Construciton Company entered into a fixed price contract to construct an apartment building for $6,000,000. Oine will satisfy the performance
On April 1, 2015, Pine Construciton Company entered into a fixed price contract to construct an apartment building for $6,000,000. Oine will satisfy the performance obligation in the contract over time and appropriately accounts for this contract. Information relating to the contract is as follows:
At December 31, 2017 At December 31, 2018
Percentage of Completion 20% 60%
Estimated costs at completion $4,500,000 $4,800,000
Gross profit recognized (Cumulative) $300,000 $720,000
What is the amount of contract costs incurred during the year ended December 31, 2018?
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