Question
On December 31, 2019, Mass Construction Inc. signs a contract with the state of Massachusetts Department of Transportation to manufacture a bridge over the Merrimack.
On December 31, 2019, Mass Construction Inc. signs a contract with the state of Massachusetts Department of Transportation to manufacture a bridge over the Merrimack. Mass Construction anticipates the construction will take three years. The company's accountants provide the following contract details relating to the project:
| Contract price | $520 million |
| Estimated construction costs | $300 million |
| Estimated total profit | $220 million |
During the three-year construction period, Tri-State incurred costs as follows:
| 2020 | $ 60 million |
| 2021 | $150 million |
| 2022 | $ 90 million |
Tri-State uses the percentage of completion method to recognize revenue. Which of the following represent the profits recognized in 2020, 2021, and 2022?
| A. | $44 million, $110 million, $66 million | |
| B. | $52 million, $312 million, $156 million | |
| C. | None of the above | |
| D. | $104 million, $260 million, $156 million | |
| E. | $104 million, $110 million, $66 million |
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The FinTech Book The Financial Technology Handbook For Investors Entrepreneurs And Visionaries
Authors: Susanne Chishti, Janos Barberis
1st Edition
111921887X, 9781119218876
