REVENUE RECOGNITION AND STATEMENT OF INCOME EXERCISE

Testbank, Question 59 Khouri Construction agreed to build a shopping centre for $25,000,000 over the next four years. Estimated cost for years one through four are: $7,500,000; $5,000,000; $5,000,000; and $2,500,000. Estimated profit or loss for year one, assuming the percentage of completion method, would be $(1,250,000). $0. $1,250,000. $1,875,000