The concept of recognition requires that an item have a relevant attribute capable of being quantified in monetary units with reasonable reliability. Different measurement attributes of assets and liabilities are used in current practice. Select from the option list provided the attribute that best relates to each recognition concept below. Each choice may be used once, more than once, or not at all. Recognition Concept 1. The relevant attribute for plant assets and most inventories 2. The relevant attribute defined as the cash or equivalent that would be paid for a current acquisition of the same or an equivalent asset 3. The relevant attribute used to measure assets expected to be sold at below their carrying amount 4. The relevant attribute used to measure short-term receivables 5. The relevant attribute that incorporates time value of money concepts Answer On January 1, Year 1, Cumulus Contracting, Inc., entered into an agreement to construct a building on the customer's land. The project was expected to take 3 years and involve a total cost of $6,000,000. The client has agreed to pay Cumulus $9,000,000 upon completion of the building. Cumulus determined that revenue from this contract is recognized over time. Cumulus uses the input method based on costs incurred to measure progress toward completion of the contract. The following information about the costs of the project are taken from the accounting records of Cumulus. Year 1 Costs incurred during year $1,000,000 Year 2 $3,000,000 Year 3 $4,000,000 Expected future costs $5,000,000 $4,000,000 $0 Enter the appropriate amounts in the associated cells. Enter all amounts as positive values. Round all amounts to the nearest whole number. If no entry is necessary, enter a zero (0). Gross profit for year 1. Year 1 2. Year 2 3. Year 3 Amount 123 123 123