The following data relate to a construction job started by Worthington Co. during 2011:

See Worthington Co. information above. Under the completed-contract method, how much should Worthington recognize as gross profit for 2011?
A) $0
B) $30,000
C) $40,000
D) $90,000

Question

The following data relate to a construction job started by Worthington Co. during 2011:

See Worthington Co. information above. Under the completed-contract method, how much should Worthington recognize as gross profit for 2011?
A) $0 
B) $30,000 
C) $40,000 
D) $90,000

Quizplus · Accepted Answer

Under the completed-contract method, revenue, expenses, and gross profit are not recognized until the project is complete. In this case, the project is not completed by the end of 2011, so no revenue, expenses or gross profit should be recognized.

The Following Data Relate to a Construction Job Started by Worthington