During 2008, Eaton Corp. started a construction job with a total contract price of $3,500,000. The job was completed on December 15, 2009. Additional data are as follows:
Under the completed-contract method, what amount should Eaton recognize as gross profit for 2009?
A) $225,000
B) $312,500
C) $475,000
D) $625,000

Question

During 2008, Eaton Corp. started a construction job with a total contract price of $3,500,000. The job was completed on December 15, 2009. Additional data are as follows:
 Under the completed-contract method, what amount should Eaton recognize as gross profit for 2009?
A) $225,000 
B) $312,500 
C) $475,000 
D) $625,000

Quizplus · Accepted Answer

$3,500,000 - $1,350,000 - $1,525,000 = $625,000