Albert Company agreed to build a bowling complex for Pins R Us for a price of $2,000,000. The project is expected to take three years to complete. Albert estimated that the total cost of the project would be $1,600,000. During the first year, construction costs amount to $600,000. If Albert uses the percentage of completion method, how much revenue will be recognized for the first year?
A) $0.
B) $150,000.
C) $600,000.
D) $750,000.

Question

Quizplus · Accepted Answer

Calculation: $2,000,000 × $600,000/$1,600,000 = $750,000.

Albert Company Agreed to Build a Bowling Complex for Pins