Consider a project that was correctly accounted for under the percentage-of-completion method.At the end of the project, the construction in process account includes total debits and credits of $3.5 Mill.Assuming that gross profit of $1.2 Mill.was recognized throughout the contract, total constructions costs were:
A)$2.3 Mill.
B)$3.5 Mill.
C)$2.1 Mill.
D)$4.6 Mill.

Question

Quizplus · Accepted Answer

The total construction costs can be calculated by subtracting the recognized gross profit from the total debits in the construction in process account. Therefore, $3.5 Mill. - $1.2 Mill. = $2.3 Mill.

Consider a Project That Was Correctly Accounted for Under the Percentage-Of-Completion