Kehl Construction Corporation contracted to construct a building for $1,500,000. Construction began in 2010 and was completed in 2011.Data relating to the contract are summarized below: Kehl uses the percentage-of-completion method and the earnings approach as the basis for income recognition.For the years ended December 31, 2010, and 2011, respectively, Kehl should report gross profit of
A)$270,000 and $170,000.
B)$900,000 and $600,000.
C)$300,000 and $140,000.
D)$0 and $440,000.

Question

Kehl Construction Corporation contracted to construct a building for $1,500,000. Construction began in 2010 and was completed in 2011.Data relating to the contract are summarized below:  Kehl uses the percentage-of-completion method and the earnings approach as the basis for income recognition.For the years ended December 31, 2010, and 2011, respectively, Kehl should report gross profit of
A)$270,000 and $170,000. 
B)$900,000 and $600,000. 
C)$300,000 and $140,000. 
D)$0 and $440,000.

Quizplus · Accepted Answer

The Answer of Kehl Construction Corporation contracted to construct a building for $1,500,000. Construction began in 2010 and was completed in 2011.Data relating to the contract are summarized below:  Kehl uses the percentage-of-completion method and the earnings approach as the basis for income recognition.For the years ended December 31, 2010, and 2011, respectively, Kehl should report gross profit of
A)$270,000 and $170,000. 
B)$900,000 and $600,000. 
C)$300,000 and $140,000. 
D)$0 and $440,000.

Kehl Construction Corporation Contracted to Construct a Building for $1,500,000