Q Construction Company entered into a contract to build a structure for $12,000,000. The estimated time to complete the contract was 18 months and the estimated total cost of the contract was $8,000,000. At the end of the first year, last year, the total accumulated cost for the contract was $6,000,000. The Architect estimated that as of the end of the year the contract was 60% completed and that the total cost of the contract would be $9,000,000. The contract was completed in the current year (this year) and the total cost of the contract was $9,200,000. The company reports its profits by the percentage of completion method.

Last years gross profit originally reported on the return should be:

	a.	a. $12,000,000
	b.	b. $9,000,000
	c.	c. $6,000,000
	d.	d. $2,000,000
	e.	e. None of the above

Q Construction Company entered into a contract to build a structure for $12,000,000. The estimated time to complete the contract was 18 months and the estimated total cost of the contract was $8,000,000. At the end of the first year, last year, the total accumulated cost for the contract was $6,000,000. The Architect estimated that as of the end of the year the contract was 60% completed and that the total cost of the contract would be $9,000,000. The contract was completed in the current year (this year) and the total cost of the contract was $9,200,000. The company reports its profits by the percentage of completion method.

This years (year of completion) gross profit is:

	a.	a. $12,000,000
	b.	b. $9,200,000
	c.	c. $800,000
	d.	d. $2,000,000
	e.	e. None of the above

1. Q Construction Company entered into a contract to build a structure for $12,000,000. The estimated time to complete the contract was 18 months and the estimated total cost of the contract was $8,000,000. At the end of the first year, last year, the total accumulated cost for the contract was $6,000,000. The Architect estimated that as of the end of the year the contract was 60% completed and that the total cost of the contract would be $9,000,000. The contract was completed in the current year (this year) and the total cost of the contract was $9,200,000. The company reports its profits by the percentage of completion method.

   The gross profit that should have been reported last year as recalculated when looking back is:

   	a.	a. $2,000,000
   	b.	b. $1,826,087
   	c.	c. $12,000,000
   	d.	d. $3,000,000
   	e.	e. None of the above