Exhibit 17-1
The following information relates to a project of the Cumberland Construction Company: The contract price was $1,200,000. Cumberland uses the cost-to-cost method of revenue recognition.
-Refer to Exhibit 17-1. Assume revenue in the amount of $200,000 was recognized in 2016. What amount of revenue would be recognized in 2017?
A) $840,000
B) $640,000
C) $616,000
D) $416,000

Question

Exhibit 17-1
The following information relates to a project of the Cumberland Construction Company:  The contract price was $1,200,000. Cumberland uses the cost-to-cost method of revenue recognition.
-Refer to Exhibit 17-1. Assume revenue in the amount of $200,000 was recognized in 2016. What amount of revenue would be recognized in 2017?
A) $840,000 
B) $640,000 
C) $616,000 
D) $416,000

Quizplus · Accepted Answer

Without the exhibit, we can only infer that the total revenue might be $840,000, and $200,000 was recognized in 2016. Therefore, the remaining revenue to be recognized in 2017 would be $840,000 - $200,000 = $640,000.

Exhibit 17-1 The Following Information Relates to a Project of the Cumberland