Question 2

Oriole Construction Company had a contract starting April 2018, to construct a $24300000 building that is expected to be completed in September 2020, at an estimated cost of $22300000. At the end of 2018, the costs to date were $10927000 and the estimated total costs to complete had not changed. The progress billings during 2018 were $510000 and the cash collected during 2018 was 3230000. Oriole uses the percentage-of-completion method.

For the year ended December 31, 2018, Oriole would recognize gross profit on the building of:

a)$0.

b)$980000.

c)$899342.

d)$11373000.