Sonex Construction Co$.$ incurred the following costs and made the following estimates in the first two years of a three$-$year

construction project.

Year$1$ Year$2$

Actual current year costs incurred

Estimated costs to complete contract

$5,000,000,5,000,000$

Contract price

$2,500,000,1,500,000$

Using the percentage of completion method of accounting, what amount would Sonex show as either a net current asset or a net

current liability as of the end of Year $2$ due to its construction activity?

Multiple Choice

$$4,000,000$ asset

$$1,800,000$ asset

$$1,500,000$ liability.